Brussels sends its proposal to the Council, setting up what could be the largest trade deal ever struck by both sides.
India-EU FTA has taken a significant step toward reality. The European Commission on September 11, sent its proposal to the Council of the European Union, seeking authorization to sign and conclude the free trade agreement. The move follows the conclusion of negotiations on January 27 this year, during the 16th India-EU Summit in New Delhi.
The development matters because it could create one of the largest bilateral trade frameworks in the world. Indian exporters, European companies and consumers on both sides stand to be affected once the pact takes effect.
What is the India-EU FTA and why does it matter now?
The India-EU FTA is a comprehensive trade agreement covering goods, services, digital trade, intellectual property, competition, subsidies, small businesses, sustainable development and dispute settlement. It has been years in the making. Talks began in 2007. They were suspended in 2013 over differences on ambition. Negotiations relaunched in 2022 and were finally concluded in January 2026.
Bilateral goods trade between India and the EU touched €118 billion in 2025. Services trade crossed €67 billion the same year. The EU also holds over €132 billion in foreign direct investment stock in India, with more than 6,000 European companies operating in the country.
What did the European Commission say about the India-EU FTA?
The European Commission described the pact in strong terms. It said that if authorised, this would become the largest trade agreement ever concluded by both the EU and India.
According to the Commission, the agreement will improve market access, reduce tariffs and provide predictable rules for investment. It is expected to eliminate or reduce tariffs on 96 percent of EU goods exports to India, potentially saving European exporters close to €4 billion a year in duties.
European Commission President Ursula von der Leyen had earlier signalled strong momentum behind the deal. Speaking at the World Economic Forum in Davos on January 20, 2026, she called it “the mother of all agreements.” The proposal follows a fast track procedure introduced this year by Trade and Economic Security Commissioner Maros Sefcovic, designed to speed up implementation of EU trade agreements at a time of global economic uncertainty.
Which Indian sectors stand to gain from the India-EU FTA?
India’s Ministry of Commerce and Industry says the India-EU FTA secures preferential access across 97 percent of tariff lines, covering 99.5 percent of India’s trade value with the bloc. Several export heavy sectors are positioned to benefit the most.
| Sector | Current EU exports | Tariff change |
| Engineering goods | $16.6 billion | Tariffs up to 22% reduced |
| Textiles and apparel | $7.2 billion | Tariffs up to 12% moved to zero |
| Gems and jewellery | $2.7 billion | Preferential access on 100% of trade value |
| Marine products | $2.7 billion | Preferential access against tariffs up to 26% |
| Chemicals | $2.4 billion | Zero duty on 97.5% of export basket by value |
| Leather and footwear | $2.4 billion | Tariffs up to 17% eliminated |
| Plastics and rubber | $2.4 billion | Preferential access across major categories |
Source: Ministry of Commerce and Industry, Government of India, India-EU FTA factsheet
Textiles could see a major boost given the EU imports roughly $263.5 billion worth of textiles and apparel globally every year. Engineering goods offer an even larger existing export base for Indian manufacturers.
How will the India-EU FTA change tariffs for exporters?
The tariff cuts follow a phased structure under the India-EU FTA.
- Around 70.4 percent of tariff lines, covering 90.7 percent of India’s exports, get immediate duty elimination.
- Another 20.3 percent of tariff lines, covering 2.9 percent of exports, move to zero duty over three to five years.
- The remaining 6.1 percent of tariff lines receive preferential treatment through tariff reductions or tariff rate quotas.
Indian exporters will still need to meet European product, environmental and food safety standards. Lower tariffs alone will not guarantee higher exports without compliance with these regulatory requirements.
What does the India-EU FTA mean for European businesses?
The agreement is not one sided. European companies gain meaningfully improved access to India’s market too. India’s tariffs on European motor vehicles will gradually fall from levels as high as 110 percent to 10 percent, subject to an annual quota of 250,000 vehicles. European machinery, chemicals, pharmaceuticals and medical equipment also gain better access under the India-EU FTA.
The European Commission estimates that EU machinery and appliance exports to India were worth around €16.3 billion in 2024, with tariffs on some products reaching as high as 44 percent before the deal. Services form another important pillar. The agreement includes provisions on professional services, financial services, telecommunications and the temporary movement of skilled workers between the two economies.
What happens next before the India-EU FTA enters into force?
The India-EU FTA is not yet operational. Several procedural steps remain before it becomes legally binding. The sequence works as follows:
- Council of the European Union authorises the signature and conclusion of the agreement
- The agreement is formally signed by both sides
- The European Parliament gives its consent
- The EU completes its internal conclusion procedures
- India completes its own domestic ratification and internal procedures
- The agreement finally enters into force
European Trade Commissioner Maros Sefcovic and Agriculture and Food Commissioner Christophe Hansen visited India on September 12 and 13, 2026 to meet Union Commerce and Industry Minister Piyush Goyal. The visit was aimed at taking stock of the agreement and strengthening business ties between the two sides, according to a post by the EU Delegation to India on the social media platform X.
Germany has also voiced support for finalising the pact quickly. German Foreign Minister Johann Wadephul told External Affairs Minister S Jaishankar that Berlin backs the agreement and will use its influence within the European Commission to help move it forward.
For now, the India-EU FTA remains a landmark agreement on paper. Its real economic impact will depend on how quickly the remaining approval steps are completed on both sides, and how effectively Indian and European businesses adapt to the new trading rules once the pact takes effect.