NEW DELHI: India and the European Union (EU) on Tuesday announced a landmark Free Trade Agreement (FTA), earlier described by European Commission president Ursula von der Leyen as the “mother of all deals.”
Click here for live updatesThe announcement came a day after the Republic Day parade, which was attended by von der Leyen and European Council president Antonio Costa as chief guests.
1 agreement, 27 EU markets
The pact is expected to come into force in 2027.
Trade deal benefits explained
Key gains for India under the FTA include:
- Premium luxury European cars, such as BMW, Mercedes, Lamborghini, Porsche, and Audi, set to become cheaper for India as India will offer quota-based import duty concessions under the pact.
- The duty on on EU wines would fall from 150 percent to 20 percent, making them cheaper for India,
- Over 99% of Indian export value to now enter the EU duty-free.
- Labour-intensive sectors (such as textiles, leather, marine products, and jewellery) worth $33 billion set to gain immensely from preferential access under the agreement.
- 9,425 tariff lines cleared for Indian goods.
- Access to 144 EU sub-sectors (IT, finance, education, etc).
- The EU has also offered commitments in 37 sectors/sub-sectors for contractual service suppliers (CSS) and 17 sectors/sub-sectors for independent professionals.
- For Indian students, a guaranteed post-study visa framework of at least nine months.
- Access for practitioners of Indian traditional medicine to work in EU states under their home titles.
- Secure financial and technical support for Indian MSMEs to comply with carbon requirements.
- Entry and working rights for dependents/families of intra-corporate transferees.
- A framework to engage in social security horizon over a five-year framework.
- Cooperation in AI, clean tech, and semiconductors.
- Cooperation to advance innovation and secure cross-border electronic payments.
The FTA brings together India, the world’s fourth-largest economy, and the EU, the second-largest. Together, they account for about 25% of global GDP and nearly one-third of global trade. The European Union is India’s 22nd FTA partner. New Delhi recently finalised a free trade pact with the UK in July last year and concluded discussions on a similar agreement with New Zealand in December 2025.
India-EU trade (FY25)
Hailing the agreement, Prime Minister Narendra Modi said, "This is an excellent example of coordination between two economies of the world. The FTA will strengthen confidence in India for every business and every investor in the world. India is working extensively on global partnerships in all sectors."
The bilateral trade between India and the EU crossed $190 billion in 2024-25. India exported $75.9 billion in goods and $30 billion in services to the EU, while the EU exported $60.7 billion in goods and $23 billion in services to India.
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