EU–India Free Trade Agreement Concluded: Major Global Trade Milestone

After nearly two decades of negotiations, the European Union (EU) and the Republic of India have officially concluded a landmark Free Trade Agreement (FTA), a historic milestone that promises to reshape global commerce and redefine economic ties between two of the world’s largest markets. 

On 27 January 2026, leaders from India and the EU gathered in New Delhi to announce the conclusion of what has been dubbed the “mother of all trade deals.” The agreement comes at the end of almost 20 years of discussions, stop-starts, and strategic recalibrations, making it one of the most significant trade breakthroughs of the 21st century.

European Commission President, Ursula von der Leyen, said: “The EU and India make history today, deepening the partnership between the world's biggest democracies. We have created a free trade zone of 2 billion people, with both sides set to gain economically. We have sent a signal to the world that rules-based cooperation still delivers great outcomes. And, best of all, this is only the start - we will build on this success and grow our relationship to be even stronger.”

The EU and India currently exchange more than €180 billion in goods and services each year, sustaining nearly 800,000 jobs across the EU. The new agreement will further open markets on both sides through the partial liberalisation of a substantial number of additional tariff lines, raising total trade liberalisation coverage to 96.6% for India and 99.3% for the EU. 

This agreement represents the most far-reaching market opening India has ever offered to a trading partner. It will deliver a strong competitive edge to European industrial and agri-food sectors by providing preferential access to the world’s most populous nation, home to 1.45 billion people, and one of the fastest-growing major economies globally, with an annual GDP of €3.4 trillion.

Strong Sectoral Gains on Both Sides

For the EU, the agreement creates new and improved opportunities in strategic industries such as agri-food, chemicals, pharmaceuticals, machinery, medical devices, avionics, and the automotive sector. India, in turn, stands to gain significantly in sectors including fisheries, chemicals, textiles, footwear, and pharmaceuticals, reinforcing its export potential in global value chains.

A central pillar of the agreement is India’s commitment to reduce or eliminate high tariffs on a wide range of industrial products, where average duties currently exceed 16%. These reductions will be implemented either upon entry into force of the agreement or gradually over transition periods, depending on the sector. Key changes include:

• Chemicals: tariffs of up to 22% largely removed at entry into force
• Cosmetics: tariffs of up to 22% phased out over 5 to 7 years
• Plastics: partial liberalisation at entry into force, with broader cuts after 7 years
• Car parts: most tariffs eliminated over 5 to 10 years
• Textiles and apparel: most tariffs removed immediately
• Ceramics: most tariffs removed at entry into force
• Machinery: around half of tariffs eliminated immediately, with the remainder phased out over up to 10 years
• Boats: tariffs largely removed at entry into force

These duty reductions and eliminations will significantly facilitate EU exports in sectors that previously faced prohibitive tariff barriers, opening the Indian market to a broader range of European products. 

In the agri-food sector, where India maintains high levels of protection and clear sensitivities, the agreement strikes a careful balance. It expands market access for key EU export interests while preserving safeguards for sensitive products.

The agreement will eliminate duties on several important EU agri-food exports, such as:

• Olive oil (current tariffs of up to 45%), eliminated at entry into force or after a five-year staging period
• Non-alcoholic beer and selected fruit juices (tariffs up to 55%), eliminated within five years
• Processed foods such as confectionery, bread, pastry, pasta, chocolate, and pet food (tariffs around 33%), eliminated either immediately or after staged reductions
• Sheep meat (tariffs of 33%), eliminated progressively over time

The agreement will also deliver significant improvements in market access for wine, spirits, beer, and fruit exports, including:

• Alcoholic beverages: EU exports currently facing extremely high tariffs, in some cases up to 150%, will see duties gradually reduced to 30% for most wines, 40% for all spirits, and 50% for beer.
• Fruits: EU exports of fruits, such as kiwis and pears, will benefit from sizeable Tariff Rate Quotas (TRQs), enabling European producers to expand their market share in India.
• Regulatory cooperation: The agreement will establish a dedicated working group on wines and spirits, providing a structured platform for information exchange and cooperation between the parties, including on oenological practices.

Meanwhile, the EU will safeguard its sensitive agricultural sectors. As a result, no market access concessions will be granted for products such as sugar and ethanol, rice and soft wheat, beef and poultry, milk powders, bananas, and honey, while carefully calibrated tariff quotas will restrict imports of table grapes and cucumbers.

Furthermore, in line with the Agreement’s sanitary and phytosanitary (SPS) provisions, the EU will fully uphold its high standards on food safety and animal and plant health. The Union’s strict SPS rules will remain unchanged, with no derogations or exceptions.

Intellectual Property 

The Agreement establishes strong commitments by both the EU and India to ensure the effective protection and enforcement of intellectual property (IP) rights, reinforcing an environment that supports innovation, creativity, and fair competition. The IP chapter is designed to:

• encourage innovation and creative activity across both markets;
• support cross-border trade in knowledge-based and creative goods and services; and
• lower trade frictions while stimulating investment in a way that contributes to sustainable and inclusive economic growth.

The agreement delivers a comprehensive and high standard of IP protection, consistent with the respective legal frameworks of the EU and India. It applies to a wide range of intellectual property rights, including:

• copyrights and related rights;
• trademarks;
• industrial designs;
• trade secrets and confidential business information; and
• plant variety protection.

To ensure these rights are meaningful in practice, the IP chapter includes detailed provisions on enforcement, setting out the procedures, remedies, and measures each party must have in place. It also reaffirms the Parties’ obligations under key international intellectual property agreements, ensuring alignment with global IP standards.

Small and Medium-Sized Enterprises

The agreement includes a dedicated chapter on small and medium-sized enterprises (SMEs), alongside several additional provisions specifically designed to support smaller businesses.

A key feature is the obligation for both parties to make clear, practical information available on how companies can access and operate in each other’s markets. This information will be consolidated on a single, publicly accessible digital platform, making it easier for businesses to navigate regulatory and market entry requirements.

Both the EU and India will also establish SME contact points, which will work together to identify and promote ways in which small businesses can take advantage of the opportunities created by the agreement. Through this cooperation, SMEs will have easier access to accurate, up-to-date guidance on setting up and doing business in the partner market, strengthening their capacity to benefit from the FTA.

More broadly, tariff reductions, increased transparency, and the removal of regulatory obstacles will help companies lower costs, simplify procedures, and improve operational efficiency, while providing greater legal certainty and a predictable regulatory framework. These improvements are particularly valuable for SMEs, which often have more limited resources to manage complex trade and regulatory requirements.