India and the European Union have concluded a landmark free trade agreement, marking one of the most comprehensive trade deals ever signed by either side. The agreement creates a vast free trade zone covering nearly two billion people and is expected to significantly boost bilateral trade and investment.
Under the deal, India will gradually reduce tariffs on a wide range of European goods, including automobiles and wine, with car import duties set to fall to 10% over five years from levels as high as 110%. In return, Indian exports such as textiles, gems, and pharmaceuticals will gain easier access to European markets.
The agreement is projected to eliminate or reduce tariffs on over 96% of traded goods by value, leading to an estimated €4 billion in annual savings for European companies and potentially doubling EU exports to India by 2032. It also opens new opportunities in manufacturing and services for businesses on both sides.
Negotiations for the deal began in 2007, stalled for several years over market access issues, and resumed in 2022. Talks accelerated recently amid shifting global trade dynamics and shared concerns over supply chain concentration and rising protectionism elsewhere.
The formal signing is expected later this year, with the agreement likely to come into force in early 2027, positioning India and the EU as key partners in global trade.