Ashhar Alam/New Delhi 

India and the European Union on Tuesday formally announced the conclusion of the long-awaited India–EU Free Trade Agreement (FTA), marking a watershed moment in bilateral economic relations. The announcement was made at the 16th India-EU Summit by Prime Minister Narendra Modi, European Commission President Ursula von der Leyen and European Council President António Costa during the visit of senior EU leaders to India.

The formal exchange of documents took place between EU Trade Commissioner Maroš Šefčovič and Union Commerce and Industry Minister Piyush Goyal, signalling the end of negotiations that were relaunched in 2022 after a prolonged hiatus.

The agreement represents one of India’s most ambitious and comprehensive trade deals to date, reflecting a shared intent to build a modern, balanced and rules-based economic partnership amid a rapidly evolving global trade environment.

The European Union is among India’s largest trading partners. In 2024–25, bilateral trade in goods stood at ₹11.5 lakh crore (USD 136.5 billion), while trade in services reached ₹7.2 lakh crore (USD 83.1 billion). Together, India and the EU account for nearly a quarter of global GDP and about one-third of global trade, underlining the scale and strategic significance of the partnership.

Commerce Minister Piyush Goyal described the agreement as a defining milestone in India’s global economic engagement, noting that it reinforces India’s approach of forging trusted, mutually beneficial partnerships. He credited the agreement to sustained political commitment and strategic clarity at the highest level.

Beyond tariff reductions, the India–EU FTA establishes a broad-based economic framework covering goods, services, investment facilitation, digital trade, SMEs, customs cooperation and regulatory transparency. India has secured near-total market access for its exports by value, a move expected to significantly strengthen the ‘Make in India’ initiative and boost export-led growth.

Labour-intensive sectors such as textiles, apparel, leather, footwear, gems and jewellery, engineering goods and marine products are set to benefit from immediate tariff eliminations, improving competitiveness in one of the world’s largest consumer markets. The agreement is also expected to generate employment and integrate Indian enterprises more deeply into global value chains.

In automobiles, a calibrated, quota-based liberalisation mechanism has been agreed upon, allowing EU manufacturers access to higher-end segments of the Indian market while creating future opportunities for vehicle manufacturing and exports from India.

Agriculture and processed food exports are poised for gains, with enhanced access for products such as tea, coffee, spices, fruits and processed foods. At the same time, India has protected sensitive sectors including dairy and cereals to balance export growth with domestic priorities.

The agreement also places strong emphasis on services one of India’s key strengths, offering predictable market access across a wide range of sectors such as IT and IT-enabled services, professional services, education, finance, tourism and construction. Provisions on mobility are expected to facilitate the movement of skilled professionals, business visitors and intra-corporate transferees between the two regions.

Importantly, the FTA addresses emerging challenges through cooperation on digital trade, clean technologies, artificial intelligence and semiconductors. It also includes mechanisms to manage non-tariff barriers, streamline customs procedures and address sustainability concerns, including cooperation under the EU’s Carbon Border Adjustment Mechanism (CBAM).

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With this agreement, the EU becomes India’s 22nd FTA partner. Alongside recent trade deals with the UK and EFTA countries, the India–EU FTA effectively opens up the broader European market for Indian exporters and investors.

Aligned with India’s long-term vision of Viksit Bharat 2047, the agreement is expected to deepen strategic trust, foster innovation and support inclusive growth, positioning India as a reliable and forward-looking partner in the global economic order.