India, EU Conclude Landmark Free Trade Agreement, Unlocking New Era of Economic Partnership

New Delhi, Jan 27: India and the European Union on Tuesday announced the conclusion of a long-awaited Free Trade Agreement (FTA), marking a historic milestone in bilateral economic relations. The breakthrough was jointly घोषित at the 16th India–EU Summit by Prime Minister Narendra Modi and European Commission President Ursula von der Leyen.

The agreement brings together the world’s fourth-largest economy and the second-largest economic bloc, representing nearly 25 per cent of global GDP and about one-third of global trade. It positions India and the EU as “trusted partners” committed to open, predictable and inclusive growth.

A key highlight of the pact is unprecedented market access: over 99 per cent of Indian exports by value will gain preferential entry into the EU. Nearly USD 33 billion of exports from labour-intensive sectors such as textiles, leather, marine products, gems and jewellery will see tariffs reduced to zero when the agreement enters into force.

The government said exports worth INR 6.41 lakh crore (USD 75 billion) are poised for a major take-off, with significant job creation expected for women, artisans, youth and MSMEs.

In 2024–25, India–EU trade in goods stood at INR 11.5 lakh crore (USD 136.54 billion), while services trade touched INR 7.2 lakh crore (USD 83.10 billion), underlining the scale of the partnership.

Union Commerce and Industry Minister Piyush Goyal called the agreement a “defining achievement” in India’s global trade engagement, noting that it goes beyond a conventional trade deal to include strategic cooperation in services, mobility, technology and clean energy.

The FTA provides ambitious market access in services, covering 144 subsectors offered by the EU and 102 by India, including IT, professional services, education, finance and tourism. A future-ready mobility framework will facilitate movement of skilled professionals, intra-corporate transferees and service suppliers, with provisions for dependents and post-study opportunities.

In agriculture, Indian products such as tea, coffee, spices, fruits and processed foods will gain enhanced access, while sensitive sectors like dairy, cereals and poultry have been safeguarded with no market opening.

The agreement also addresses non-tariff barriers, strengthens customs and SPS procedures, and includes forward-looking provisions on carbon border adjustment mechanisms (CBAM), intellectual property rights, digital trade and cooperation in artificial intelligence, clean technologies and semiconductors.

With this pact, the EU becomes India’s 22nd FTA partner. Along with recent deals with the UK and EFTA, the India–EU FTA effectively opens the entire European market to Indian exporters.

Aligned with the vision of “Viksit Bharat 2047,” the government said the agreement lays the foundation for inclusive, resilient and future-ready growth, while deepening India’s integration into global value chains and strengthening its role as a key global trade partner.