External Affairs Minister S. Jaishankar described the recently concluded India-EU Free Trade Agreement (FTA) as a “game changing” development while speaking at the inaugural India-EU Forum organised by the Ananta Centre in partnership with the Ministry of External Affairs. In a post on X, he said the FTA has transformed the partnership and highlighted further opportunities in security, defence, climate, technology and talent mobility. He expressed hope the forum would deepen dialogue and convergence between India and the EU.
The FTA, finalised and signed on January 27, is framed as a modern, rules-based trade deal designed to strengthen market integration and address contemporary global challenges. It links India—now the world’s fourth-largest economy—with the EU, the second-largest, covering a combined market valued at roughly Rs 2,091.6 lakh crore (about USD 24 trillion).
Major trade and market outcomes
– The agreement grants preferential market access for more than 99% of India’s exports by trade value while protecting policy space for sensitive sectors and development priorities. India secured preferential treatment across about 97% of tariff lines, representing roughly 99.5% of bilateral trade value.
– Bilateral merchandise trade in 2024–25 was around Rs 11.5 lakh crore (USD 136.5 billion), with India’s exports to the EU at about Rs 6.4 lakh crore (USD 75.9 billion). Services trade reached approximately Rs 7.2 lakh crore (USD 83.1 billion) in 2024.
– Immediate duty elimination applies to 70.4% of tariff lines, covering 90.7% of India’s exports—especially labour-intensive categories such as textiles, leather and footwear, tea, coffee, spices, sports goods, toys, gems and jewellery, and some marine products.
– A further 20.3% of tariff lines will be phased to zero over three to five years. Around 6.1% of lines will see tariff reductions or be managed through tariff rate quotas for items such as automobiles, certain steel products and some shrimp/prawn categories.
– Sectors currently facing EU duties of 4–26%—together worth over Rs 2.87 lakh crore (USD 33 billion) in exports—will gain zero-duty access once the FTA enters into force.
– India will eliminate or cut duties on 92.1% of its tariff lines covering 97.5% of EU exports: 49.6% of lines will see immediate elimination and 39.5% will be phased out over five, seven and ten years.
Agriculture, rules of origin and MSME measures
– The deal offers preferential access for agricultural and processed foods such as tea, coffee, spices, grapes, gherkins, cucumbers, dried onion and a variety of fresh produce, while safeguarding sensitive items including dairy, cereals, poultry and soymeal.
– Product-specific rules of origin are aligned with existing supply chains, permit self-certification and include flexibilities for micro, small and medium enterprises. The agreement also sets quotas for shrimp and prawn exports and some downstream aluminium products.
Services, mobility and professional access
– The EU committed to broader market access across 144 service sub-sectors—including IT/ITeS, professional services, education and business services—while India opened 102 sub-sectors responding to EU priorities like telecommunications, maritime, financial and environmental services.
– The FTA establishes a mobility framework for Indian professionals, covering intra-corporate transferees, contractual service suppliers and independent professionals across many sub-sectors, and envisages negotiating social security agreements within five years.
– Practitioners of traditional Indian medicine (AYUSH) will gain improved ability to provide services in EU member states, with future openings for wellness centres and clinics anticipated.
Standards, IP and sectoral impacts
– The agreement strengthens intellectual property protections in line with TRIPS, recognises India’s Traditional Knowledge Digital Library (TKDL), and enhances cooperation on sanitary and phytosanitary (SPS) and technical barriers to trade (TBT) through digitisation and mutual recognition.
– Significant gains are expected across engineering goods, marine products, leather and footwear, gems and jewellery, textiles and apparel, plastics and rubber, chemicals, medical instruments and minerals as tariff eliminations or cuts open major EU markets and support job creation in India.
Outlook
The India-EU FTA is positioned to convert bilateral ties into a comprehensive, predictable economic partnership that helps exporters and businesses—including MSMEs—plan investments and integrate into European value chains. Jaishankar emphasised the potential to build on this economic foundation to pursue broader convergence in security, defence, climate action, technology cooperation and talent flows.
Source: ANI (syndicated content published as received).
