Context and Significance
- India and the European Union concluded their largest-ever Free Trade Agreement after negotiations launched in 2007.
- The agreement was revived in 2022 and finalised amid global trade uncertainty and U.S. tariff pressures.
- Leaders highlighted the pact’s role in strengthening strategic autonomy, stability, and cooperation in a multipolar world.
Core Economic Commitments
- The EU will eliminate or reduce tariffs on 99.5% of Indian exports to its 27-member bloc.
- 90.7% of Indian exports will enter the EU at zero duty from day one.
- Another 2.9% of exports will see phased elimination over three to five years.
- India will remove or reduce duties on 97.5% of EU imports, covering 92.1% of tariff lines.
- 49.6% of EU tariff lines will receive immediate duty elimination after entry into force.
Sectoral Gains for India
- Labour-intensive sectors gain zero-duty access, including textiles, apparel, leather, footwear, tea, spices, and toys.
- Duties removed on marine products, chemicals, base metals, gems, jewellery, furniture, and rubber items.
- The EU committed to market access across 144 services sub-sectors, including IT, education, and professional services.
- India secured a 1.6 million tonne duty-free steel export quota into the European market.
Concessions to the European Union
- India offers duty-free entry for machinery, pharmaceuticals, aircraft, medical equipment, and motor vehicles.
- Car tariffs fall from 110% to 10% under a 250,000 vehicle quota system.
- Wine duties drop from 150% to 20–30%, expanding access for European producers.
- Zero tariffs apply to Airbus aircraft, processed food, most machinery, and pharmaceutical products.
Strategic and Political Dimensions
- Both sides announced a Security and Defence Partnership, shifting from buyer-seller to co-producers.
- Talks began on a Security of Information Agreement to enable classified data sharing.
- The EU urged India to press Russia for peace in Ukraine during summit-level discussions.
- Joint statements supported UN Resolution 2803 (2025) and reaffirmed the two-state solution for Gaza.
India-EU Nuclear and Research Cooperation
- EU and India reaffirm collaboration on peaceful nuclear energy uses under the India–Euratom R&D agreement signed in July 2020.
- Cooperation covers nuclear science research, radiation safety, nuclear security, radio-pharmaceuticals, and ITER participation.
- Both sides will deepen research ties through Horizon Europe, including energy, semiconductors, biotech, and advanced materials.
Exclusions and Safeguards
- India protected agriculture and dairy, while the EU retained tariffs on beef, rice, chicken, sugar, and ethanol.
- No agreement reached on government procurement in energy and raw materials.
- India rejected a binding “sustainable development” chapter in the final text.
Implementation and Economic Outlook
- The agreement will undergo legal scrubbing, translation, and European Parliament ratification.
- The EU estimates €4 billion annual tariff savings for exporters after implementation.
- Business groups expect deeper integration into global value chains and stronger supply chain resilience.
- The India-EU FTA combines market access, strategic cooperation, and geopolitical signalling.
- The partnership positions both economies as indispensable democratic anchors in a divided global order.