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Tatjana Vargas
Economics and Foreign Trade
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EU and India conclude negotiation of Free Trade Agreement
On 27 January 2026 the European Union and India have concluded negotiations of a free trade agreement. The agreement creates a free trade zone encompassing more than two billion people. What is more, it includes some of the most far-reaching trade liberalizations India has ever granted an economic partner. European companies will benefit from privileged access to India’s market as tariffs on over 90 percent of EU exports to India will be eliminated.
Tariff liberalization in important sectors
| Category | Current tariff rate | Future tariff rate |
| Machinery and electrical equipment | Up to 44 percent | 0 percent for most products |
| Air and spacecraft | Up to 11 percent | 0 percent for most products |
| Medical technology | Up to 27,5 percent | 0 percent for most products |
| Plastics | Up to 16,5 percent | 0 percent for most products |
| Chemicals | Up to 22 percent | 0 percent for most products |
| Motor vehicles | 110 percent | 10 percent for a quota of 250,000 vehicles p. a. |
| Iron and steel | Up to 22 percent | 0 percent for most products |
| Pharmaceuticals | Up to 11 percent | 0 percent for most products |
Agriculture
The EU and India want to protect their agricultural sector. Therefore, the trade agreement largely excludes agricultural products. For example, tariffs on beef, sugar and rice will not be lowered. The EU and India are currently negotiating a separate agreement on geographical indications, intended to protect EU agricultural products from imitation.
Examples for tariff liberalization in the agricultural sector
| Product | Current tariff rate | Future tariff rate |
| Wine | 150 percent | 20 percent (premium products) 30 percent (mid-rage products) |
| Spirits | Up to 150 percent | 40 percent |
| Beer | 110 percent | 50 percent |
| Fruit juice and alcohol-free beer | Up to 55 percent | 0 percent |
| Processed foods (e. g. bread, baked goods, chocolate, animal feed) | Up to 50 percent | 0 percent |
Services and protection of intellectual property
The trade agreement will liberalize trade in services. For example, EU service providers will receive privileged access to the Indian financial services sector and maritime transport. Additionally, the trade agreement is intended to grant a high level of protection for intellectual property rights including copyrights, brands, designs, and trade secrets. This will make it easier for Indian and European companies depending on strong IP protection to trade and invest.
Next steps
The negotiated draft text is currently undergoing legal review and will be published shortly. The Commission will then submit a proposal to the Council to sign the agreement. Following its adoption by the Council, the EU and India can sign the agreement.
After signing, the agreement requires the approval of the European Parliament and a decision by the European Council on its conclusion in order to enter into force. Additionally, India must ratify the agreement.
