India-EU FTA to benefit industry on both sides, spur investments: Goyal

Union Commerce Minister Piyush Goyal on Tuesday said the India–European Union free trade agreement would benefit industries in both regions, open new avenues for investment, and is expected to be implemented within the calendar year 2026.

 

Speaking after the conclusion of the India–EU free trade agreement, Goyal said the pact was a win-win for all sections of industry in India as well as Europe.

 

“This agreement is a win-win for all sections of industry in India and Europe,” the commerce minister said, adding, “The India–EU FTA opens up a plethora of opportunities for investments on both sides”.

 

The minister said the government was optimistic about operationalising the agreement within a defined timeline: “We are hopeful of implementing the India–EU trade pact within the calendar year 2026”.

 

 

The two sides concluded what officials described as the “mother of all deals” after negotiations that stretched over more than two decades.

 

Under the agreement, 93 per cent of Indian exports will receive duty-free access to the 27-nation European Union, while imports of luxury cars and wines from the bloc will become less expensive.

 

The pact will create a combined market of around two billion people across India and the European Union.

 

Taken together, India and the EU account for about 25 per cent of global gross domestic product and roughly one-third of global trade, estimated at around $11 trillion out of $33 trillion.

 

The agreement marked the conclusion of negotiations that began over 20 years ago. 

What the India–EU FTA delivers for both sides and the road ahead

For India, the agreement secures near-complete market access to the European Union, with 99 per cent of export value set to enter the bloc duty-free, covering 96.8 per cent of EU tariff lines, Ministry of Commerce and Industry said in a factsheet it published today. 

 

Of this, 70.4 per cent of tariff lines, accounting for 90.7 per cent of India’s exports, will receive zero-duty access from day one, benefiting sectors such as marine products, gems and jewellery, electronics, leather and footwear, textiles, rubber, chemicals and toys, it added. 

 

For the European Union, India has offered market access across 92.1 per cent of its tariff lines, covering 97.5 per cent of EU exports, with nearly half seeing immediate duty elimination and most others subject to phased reductions over five to ten years, the factsheet said.   India’s tariffs on cars will be gradually reduced from 110 per cent to as low as 10 per cent under a quota system, with duties on car parts eliminated over time. 

 

Tariffs on machinery, chemicals, pharmaceuticals, vegetable oils, wine and processed food will also be sharply reduced or abolished, alongside access to India’s services market, including financial and maritime services. At the same time, India has safeguarded sensitive domestic sectors such as dairy, cereals, poultry, soymeal and certain fruits and vegetables.