India–EU Free Trade Agreement: India and the European Union today announced the conclusion of the India–EU Free Trade Agreement (FTA) at the 16th India–EU Summit. The announcement was jointly made by Hon’ble Prime Minister Shri Narendra Modi and European Commission President H.E. Ms. Ursula von der Leyen, marking a defining moment in bilateral relations.
Partnership of Two Major Global Economies
The agreement brings together the world’s 4th and 2nd largest economies, jointly accounting for nearly 25 per cent of global GDP and about one-third of global trade. The FTA reinforces India and the EU as trusted partners committed to open, predictable and rules-based trade.
Unprecedented Market Access for Indian Exports
Under the FTA, over 99 per cent of Indian exports by value will receive preferential access to the EU market. Exports worth around INR 6.41 lakh crore (USD 75 billion) are expected to benefit, unlocking significant growth potential for Indian industry.
Big Boost for Labour-Intensive Sectors and MSMEs
Labour-intensive sectors such as textiles, apparel, leather, footwear, marine products, gems and jewellery will see tariffs reduced to zero on nearly USD 33 billion of exports. The agreement is expected to create jobs and empower MSMEs, artisans, women and youth.
Calibrated Auto Liberalisation to Support Make in India
A carefully designed, quota-based automobile liberalisation package will allow greater access for EU vehicles while opening future opportunities for manufacturing and exports from India. Reciprocal access will also enable Indian-made automobiles to enter the EU market.
Enhanced Opportunities for Agriculture and Processed Foods
Indian agricultural and processed food exports, including tea, coffee, spices, fruits and vegetables, will gain improved market access. Sensitive sectors such as dairy and select agricultural products have been safeguarded, with no market access commitments.
Ambitious Outcomes in Services Trade
The FTA secures commercially meaningful market access in key services sectors such as IT and IT-enabled services, professional services, education, financial services, tourism and construction, strengthening India’s services export potential.
Future-Ready Mobility Framework
A predictable mobility framework will facilitate short-term and temporary movement of professionals, business visitors and intra-corporate transferees. The agreement also supports student mobility, post-study work opportunities and engagement on social security arrangements.
Constructive Engagement on CBAM and Sustainability
Forward-looking provisions on the EU’s Carbon Border Adjustment Mechanism (CBAM) ensure technical cooperation, dialogue and targeted support to help Indian exporters adapt to emerging carbon-related requirements.
Strengthening Innovation, Technology and IPR Cooperation
The agreement reinforces TRIPS-compliant intellectual property protections and promotes cooperation in emerging areas such as artificial intelligence, clean technologies, semiconductors and digital trade.
Growing Trade and Strategic Ties
The European Union is one of India’s largest trading partners, with bilateral goods trade of INR 11.5 lakh crore and services trade of INR 7.2 lakh crore in 2024–25. The FTA is expected to further scale up trade and investment flows.
EU Becomes India’s 22nd FTA Partner
With this agreement, the EU becomes India’s 22nd FTA partner. Along with FTAs with the UK and EFTA, the deal effectively opens up the broader European market for Indian exporters and businesses.
Aligned with Viksit Bharat 2047 Vision
Beyond trade, the India–EU FTA strengthens strategic cooperation, fosters innovation and supports inclusive growth. Aligned with India’s vision of “Viksit Bharat 2047,” the agreement lays the foundation for resilient, future-ready growth for both India and the European Union.