January 27, 2026 16:07

While the free trade agreement with Mercosur has stalled in the European Parliament (see article), the deal with India is now moving ahead smoothly, opening new markets in a global environment made more challenging by U.S. tariffs.

Negotiations between the European Union and the Indian government were concluded today, strengthening existing economic and political ties between the world’s second- and fourth-largest economies, which together account for nearly 2 billion people.

Trade in goods and services between India and the EU is worth around €180 billion a year. According to European Commission projections, exports of EU-made goods and services to India could double by 2032 thanks to the elimination or reduction of 96% of current tariffs, with estimated savings of around €4 billion a year in duties. Customs procedures will also be simplified to further facilitate trade between the two sides.

“Today, we signed the EU-India Free Trade Agreement – the mother of all trade deals. We are opening an incredible market for seamless trade, investments and drastic reduction in tariffs for two billion people,” said Ursula von der Leyen, President of the European Commission. “And our Security and Defence Partnership will increase our resilience against all forms of threats. Today, we move forward together, committed to our truly transformative partnership.”

Under the agreement, India will grant privileged status to European exports. In key sectors, tariffs—currently as high as 44% on machinery and up to 22% on chemicals—will be largely eliminated. Tariffs on plastics, which currently reach 16.5% on EU exports worth €2.2 billion, will be reduced to zero for almost all products.

The agreement also provides a high level of intellectual property protection for copyright, trademarks, designs and models, and trade secrets, making it easier for companies to trade and invest in each other’s markets.

One chapter of the agreement focuses on sustainable development, the protection of workers’ rights and the empowerment of women. The signing of a memorandum of understanding is also envisaged to establish an EU–India platform for cooperation and support on climate action.

The process is not yet complete. The negotiated draft texts will be subject to legal review and translation into all the EU’s official languages. The Commission will then submit its proposal to the EU Council for the signature and conclusion of the agreement. Once signed, the deal will still require approval by the European Parliament and a Council decision on its conclusion before it can enter into force. Following ratification by India, the agreement will become fully effective.

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