Policy Orientation and Negotiation Approach
- The government prioritises FTAs with developed, complementary economies, avoiding agreements with direct competitors.
- Leadership clarity is cited as enabling faster and decisive trade negotiations.
- India’s engagement with the EU FTA formally began in 2021, with negotiations launched in mid-2022.
- The objective aligns with India’s vision of becoming a developed nation by 2047 through global engagement.
- The FTA is framed as growth-driven, not as a geopolitical signal to other major economies.
Implementation and Institutional Readiness
- The EU–India FTA is scheduled for implementation in calendar year 2026.
- The government has already secured Cabinet approval for faster operationalisation.
- European partners have welcomed the agreement and urged rapid multilingual translation and rollout.
- Negotiations focused on “low-hanging fruits”, avoiding prolonged disputes over sensitive sectors.
Market Access and Labour-Intensive Sector Gains
- The agreement is projected to create $35 billion export potential for labour-intensive industries.
- About $33.5 billion worth of exports will receive zero-duty access from day one.
- The FTA aims to replicate advantages enjoyed by Bangladesh and Vietnam through preferential access.
- Export opportunities are highlighted for apparel, jewellery, and job-creating manufacturing sectors.
Carbon and Regulatory Provisions
- The agreement includes discussions on the Carbon Border Adjustment Mechanism (CBAM).
- Negotiations emphasised mutual trust, accommodation, and political stability as enabling factors.
- Both sides acknowledged open dialogue, including disagreements, to expand long-term engagement.
Position on RCEP and Trade Strategy
- The government strongly rejects reconsideration of the Regional Comprehensive Economic Partnership (RCEP).
- RCEP is described as potentially harmful to manufacturing capacity and MSME competitiveness.
- The concern centres on trade imbalance and increased import dependence, particularly from China.
- India asserts a strategy of concluding FTAs only with developed, non-competing economies.
Performance of Existing FTAs
- The UAE FTA saw increased imports mainly in oil and gold, which India already imports.
- Non-gold and non-petroleum exports reportedly rose significantly after the agreement.
- The government highlights employment-generating exports as the primary measure of FTA success.