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Prime Minister Narendra Modi and European Commission President H.E Ms. Ursula von der Leyen, jointly announced the conclusion of the India–European Union Free Trade Agreement (India–EU FTA) at the 16th India–EU Summit, held during the visit of the European leaders to India.
India-EU sign FTA: 99%0of Indian Exports get preferential entry into European Union
New Delhi: India and the European Union (EU) today signed Free Trade Agreement bringing down tariffs to as low on European Luxury cars from 110 per cent subject to a fixed quota of number of vehicles every year.
Prime Minister Narendra Modi and European Commission President H.E Ms. Ursula von der Leyen, jointly announced the conclusion of the India–European Union Free Trade Agreement (India–EU FTA) at the 16th India–EU Summit, held during the visit of the European leaders to India. This announcement marks a historic milestone in India–EU economic relations and trade engagement with key global partners, an official statement by the Ministry of Commerce said.
The India-EU FTA comes in the background of suspense over India-US trade deal and 50 per cent tariffs imposed by the US on Indian exports that has affected several domestic sectors including textiles and apparel industries.
The India–EU FTA gives a decisive boost to its labour-intensive sectors such as textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineering goods, and automobiles bringing down tariffs up to 10% on almost USD 33 bn of exports to zero on entry into force of the Agreement.
The European Union is India’s one of the largest trading partner, with bilateral trade in goods and services growing steadily over the years. In 2024–25, India’s bilateral trade in goods with the EU stood at INR 11.5 Lakh Crore (USD 136.54 billion) with exports worth INR 6.4 Lakh Crore (USD 75.85 billion) and imports amounting to INR 5.1 Lakh Crore (USD 60.68 billion). India-EU trade in services reached INR 7.2 Lakh Crore (USD 83.10 billion) in 2024.
The conclusion of this FTA positions India and the European Union as trusted partners committed to open markets, predictability, and inclusive growth.
Lauding the FTA signed between India and the EU, Union Minister for Commerce and Industry, Piyush Goyal said “The conclusion of the India–European Union Free Trade Agreement represents a defining achievement in India’s economic engagement and global outlook. This supports India’s approach to secure trusted, mutually beneficial and balanced partnerships. Beyond a conventional trade deal, it represents a comprehensive partnership with strategic dimensions and is one of the most consequential FTA. India has secured unprecedented market access for more than 99% of Indian exports by trade value to the EU that also bolsters the ‘Make in India’ .”
According to the FTA, India gets favourable Market Access for India’s Agricultural and Processed Food Exports. At the same time India Safeguards sensitive Agricultural products and Dairy Sector by way of “no market access.”
The FTA comes after intense negotiations since the re-launch of negotiations in 2022.
India and EU are 4th and 2nd largest economies, comprising 25% of Global GDP and account for one third of global trade. Integration of the two large diverse and complementary economies will create unprecedented trade and investment opportunities.
On automobiles, calibrated and carefully crafted quota based auto liberalisation package will not only allow EU auto makers to introduce their models in India in higher price bands but also open the possibilities for Make in India and exports from India in future. Indian consumers to benefit from high tech products and greater competition. The reciprocal market access in EU market will also open up opportunities for India made automobiles to access EU market.
Beyond tariff liberalisation, the FTA provides measures to tackle non-tariff barriers through strengthened regulatory cooperation, greater transparency, and streamlined customs, Sanitary and Phytosanitary (SPS) procedures, and Technical Barriers to Trade disciplines.
The FTA is expected to facilitate cooperation in critical areas like Artificial Intelligence, clean technologies, and semiconductors, supporting India's technological advancement.
The FTA is expected to substantially scale up trade, enhance export competitiveness, and integrate Indian businesses more deeply into the European and global value chains.
The India–EU FTA marks a new chapter in bilateral economic engagement, strengthening trade, and strategic cooperation between India and the 27-member EU bloc. With his, EU becomes India’s 22nd FTA partner. The Government since 2014 has signed trade deals with Mauritius, UAE, UK, EFTA, Oman and Australia, and announced trade deal with New Zealand. In 2025, India signed trade deal with Oman and UK and announced conclusion of trade deal with NZ.
The India-EU trade deal, along with India’s FTA with the UK and the EFTA effectively opens up the entire European market for Indian businesses, exporters and entrepreneurs.
