India and the European Union have concluded negotiations on a free trade agreement, ending a process that has run intermittently for close to two decades and accelerated since talks were relaunched in 2022.
Prime Minister Narendra Modi said the agreement had been signed, describing it as a major step for economic ties between India and the 27-member bloc.
The announcement was made as European Commission President Ursula von der Leyen and European Council President António Costa visited New Delhi for an India–EU summit. The two sides said the agreement would be followed by publication of draft legal texts, a legal review and translation, then domestic approvals in India and ratification processes on the EU side. Legal vetting and approvals are expected to take around a year, with an Indian official previously indicating implementation could follow within that timeframe once procedures are completed.
For the EU, the centrepiece is improved access to a large consumer market that has historically maintained high tariffs in several sectors. Under the terms outlined by Reuters, India will cut tariffs to zero immediately on around 30 per cent of goods traded with the EU, and will eliminate or reduce tariffs on over 90 per cent of EU exports overall. The European Commission has said the agreement would remove or reduce tariffs on more than 96 per cent of EU goods exports and could save about €4 billion a year in duties for European exporters.
Automotive provisions are among the most closely watched in Europe. India’s duties on vehicles imported from the EU are set to fall from as high as 110 per cent to 10 per cent over five years, but within an annual quota of 250,000 vehicles. Cars priced below €15,000 are excluded, and electric-vehicle tariff reductions start later in the timetable. The structure divides eligible vehicles into segments with separate quotas and phased tariff steps.
Beyond cars, India will scrap tariffs on most industrial imports from the EU, including machinery and electrical equipment, chemicals and pharmaceuticals. The agreement also includes provisions to simplify customs rules and strengthen intellectual property protections, alongside improved market access in services, including financial and maritime sectors.
India’s gains are concentrated in preferential access to the EU market for labour-intensive exports and selected industrial products. Under the launch terms, the EU will scrap all tariffs on 90 per cent of Indian goods, expanding to 93 per cent within seven years, with partial cuts and quotas applying to a smaller share. 99.5 per cent of bilateral trade would receive some form of tariff concession.
For Indian exporters, Reuters listed tariff cuts to zero on categories including marine products, chemicals, plastics and rubber, leather and footwear, textiles, apparel, base metals, and gems and jewellery. India’s Press Information Bureau also highlighted expected benefits for sectors such as textiles, apparel, leather, footwear, marine products, engineering goods, and gems and jewellery, alongside commitments in services and a mobility framework for skilled and semi-skilled workers.
Agriculture remains a politically sensitive area for both sides and was treated with safeguards and exclusions. Indian tariffs on EU agri-food exports—where average duties are cited as above 36 per cent—would be cut or removed in several categories, including wines, spirits, beer, olive oil, processed foods and some fruits. Premium wine tariffs are set to fall gradually from 150 per cent to as low as 20 per cent. At the same time, products such as beef, rice, sugar, dairy and poultry are excluded, and EU food-safety rules remain unchanged.
The agreement also intersects with the EU’s Carbon Border Adjustment Mechanism (CBAM). India did not obtain a country-specific exemption from carbon-related charges, though a technical group would support verification of carbon footprints and there would be separate arrangements on EU support for emissions reductions. India’s government statement referred to “forward looking CBAM provisions” intended to support dialogue and engagement.
The timing reflects wider trade diplomacy by both partners. The EU has pursued a series of agreements and concluded or advanced talks with other partners, while India has moved to finalise deals with countries including the United Kingdom, New Zealand and Oman.
Both sides have also framed diversification of trade links against a backdrop of uncertainty in relations with the United States. US tariffs on Indian goods were raised to as much as 50 per cent in 2025, while India–US trade negotiations faltered last year after a breakdown in communication.
