With bilateral trade in goods between India and the European Union (“EU”) nears USD 140 billion in 2024, the India–European Union Free Trade Agreement (“India–EU FTA”) marks the culmination of one of the longest and most complex trade negotiations. First initiated in 2007, the negotiations struggled for years to bridge gaps over tariffs, market access, regulatory standards, and intellectual property protection. Progress remained slow and fragmented, with negotiations eventually losing momentum altogether.
What changed was not merely negotiating strategy, but the global context itself. The full-scale invasion of Ukraine by Russia, coupled with rising geopolitical uncertainty and supply-chain disruptions, forced both India and the EU to rethink their long-standing economic dependencies. At the same time, the revival of aggressive tariff regimes and protectionist trade policies, particularly by the United States of America, created fresh urgency to diversify partnerships and secure predictable market access.
These pressures led to the re-launch of negotiations in 2022, followed by unusually rapid progress driven by strong political will on both sides. The formal announcement of the India–EU FTA on 27 January 2026 at the 16th India–EU Summit therefore represents more than the conclusion of a trade pact. It signals a decisive shift toward a modern, strategic, and rules-based economic partnership between two of the world’s largest democratic economies.
At the heart of the India–EU FTA lies an ambitious programme of tariff liberalisation, covering nearly the entirety of bilateral trade.
A tariff is a government-imposed tax or duty levied on imported goods (and occasionally exports). Tariffs are typically designed to increase the price of foreign goods, protect domestic industries from international competition, and generate government revenue. Each country maintains detailed tariff schedule listing goods on which duties are imposed, with every listed product referred to as a tariff line. When an India–EU FTA commits to eliminating duties on a percentage of tariff lines. It means that duties are removed or reduced on that proportion of listed products.
Under the India–EU FTA India will liberalise 96.6% of its tariff lines, and The EU will liberalise 99.3% of its tariff lines, resulting in tariff concessions covering 99.5% of bilateral trade.
Liberalisation is implemented through a differentiated, phase-wise schedule designed to balance ambition with domestic sensitivities. Approximately 70.4% of tariff lines, covering nearly 90.7% of India’s exports, will be subject to immediate duty elimination, particularly for key labour-intensive sectors such as textiles, leather and footwear, tea, coffee, spices, sports goods, toys, gems and jewellery, and certain marine products. A further 20.3% of tariff lines, accounting for 2.9% of India’s exports, will be granted zero-duty access over implementation periods of three to five years for select marine products, processed food items, and arms and ammunition. In addition, 6.1% of tariff lines, representing around 6% of India’s exports, will receive preferential market access through calibrated tariff reductions for specific products, including poultry, preserved vegetables and bakery items, or through tariff rate quotas for sensitive categories such as automobiles, steel and certain shrimp and prawn products.
For India, the immediate commercial gains accrue to labour-intensive sectors such as textiles, apparel, marine products, leather, footwear, chemicals, plastics, rubber, sports goods, toys, gems and jewellery. These sectors, currently facing EU import duties ranging from 4% to 26%, will gain zero-duty access from the entry into force of the India–EU FTA, significantly enhancing their competitiveness and integration into European value chains.
From EU’s side, the India–EU FTA unlocks access to the Indian market for sectors long constrained by high tariff barriers, including machinery, electrical equipment, chemicals, pharmaceuticals, medical devices, avionics and automobiles. Tariffs on completely built units automobile will be progressively reduced from the current level of 110% to 40% initially and thereafter to 10%, limited to a capped annual quota of 2,50,000 vehicles. This framework balances domestic manufacturing priorities with calibrated market openness.
The India–EU FTA also places significant emphasis on customs and trade facilitation, with the EU and India committing to further facilitate legitimate trade so that companies lawfully trading goods between the two partners are able to move goods through customs more easily and quickly, while simultaneously ensuring effective customs controls. These controls are intended to ensure that imported goods comply with the rules of the importing country, including requirements relating to safety, security and the protection of intellectual property rights. The customs and trade facilitation includes provisions on transparency, advance rulings, simplified procedures and the expedited release of goods, thereby reducing procedural delays and red tape for exporters.
To ensure that the customs framework remains future-proof, the India–EU FTA establishes the legal basis for the EU and India to broaden and deepen customs cooperation where appropriate, including in areas such as supply chain security and the exchange of customs data. This enhanced cooperation is aimed at strengthening risk management mechanisms and customs controls, particularly at the EU border, while supporting the smooth flow of legitimate trade.
The India–EU FTA strikes a careful balance between advancing market openness and preserving effective protection against unfair trade practices and import surges. It confirms the continued availability of trade defence instruments, including anti-dumping, anti-subsidy and global safeguard measures, to address instances of unfair trade between the Parties. In addition, it provides for a bilateral safeguard mechanism, allowing India and the EU to impose temporary measures where a significant increase in preferential imports under the India–EU FTA causes, or threatens to cause, serious injury to domestic industry.
The India–EU FTA addresses technical measures affecting trade in goods, including standards, technical regulations and conformity assessment procedures, incorporating the commitments under the World Trade Organisation India–EU FTA on technical barriers to trade and making them subject to bilateral dispute settlement. It upholds core principles such as most favoured nation and national treatment, promotes information exchange and bilateral consultations, and encourages the use of international standards. Transparency is strengthened through requirements for at least 60 days of public consultation on proposed technical regulations and a minimum six-month gap between publication and entry into force.
Beyond tariffs, the India–EU FTA incorporates robust regulatory and legal disciplines, particularly in intellectual property and competition law. The intellectual property chapter provides high-level protection and enforcement for copyright, trademarks, designs, trade secrets, plant varieties and undisclosed information, aligned with Indian and EU laws and relevant international agreements. The competition chapter ensures that both parties maintain competition laws applicable to all enterprises, public and private, enforced by independent authorities, while enabling cooperation between competition regulators and enhanced transparency on subsidies.
Together, these provisions move the agreement well beyond tariff reduction, embedding legal certainty, regulatory predictability and institutional cooperation at its core.
The India–EU FTA is expected to fundamentally reshape the legal services market in India, not through a single reform but through sustained, multi-layered demand across practice areas.
First, increased cross-border trade and investment will naturally lead to a surge in transactional, advisory and compliance work. Law firms will see growing demand for expertise in customs law, rules of origin, tariff classification, trade remedies, and regulatory approvals as businesses seek to fully utilise India–EU FTA benefits while avoiding compliance pitfalls.
Second, the strengthened intellectual property framework is expected to drive both advisory and contentious work. As EU companies expand operations in India and Indian businesses scale into European markets, disputes relating to trademarks, designs, trade secrets and technology transfer are likely to increase. Enforcement mechanisms under the India–EU FTA will also encourage rights holders to pursue remedies more actively, raising the profile of intellectual property litigation and enforcement strategies.
Third, enhanced competition law cooperation and subsidy transparency will intensify scrutiny of mergers, acquisitions, joint ventures and state support measures. This will generate significant work in merger control filings, antitrust investigations, compliance audits and cross-border competition strategy, particularly for transactions involving EU entities or government-linked enterprises.
Finally, the India–EU FTA’s detailed dispute settlement mechanism, combined with binding sustainability, digital trade and regulatory commitments, creates fertile ground for investor-state disputes as well as private commercial disputes. As trade volumes grow and regulatory standards tighten, disagreements over market access, environmental compliance, carbon measures and service commitments are likely to emerge, placing international trade law and international commercial arbitration and other dispute resolution mechanisms at the centre of future legal practice.
The India–EU FTA fully justifies its reputation as the “mother of all deals.” It liberalises trade at an unprecedented scale while embedding strong legal, regulatory and institutional frameworks that ensure durability and balance. By empowering labour-intensive sectors, unlocking high-value services, protecting sensitive domestic interests, and strengthening intellectual property and competition regimes, the India–EU FTA recalibrates India–EU relations for the long term.
More importantly, the India–EU FTA aligns seamlessly with India’s vision of “Viksit Bharat 2047.” It positions India not merely as a manufacturing or services destination, but as a rule-shaping participant in global trade, supported by legal certainty, institutional trust and strategic foresight.
In a world marked by fractured supply chains and contested trade rules, the India–EU FTA stands as a clear statement: that open markets backed by strong legal frameworks remain the most credible path to sustainable and inclusive growth.
About the authors: Waseem Pangarkar is a Senior Partner, Arunima Kumari, Anisha Nagarajan and Jayesh Srivastava are Associates at MZM Legal.
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