EU and India sign historic free trade agreement

The European Union and India have concluded negotiations on a free trade agreement that will be the largest in scale for both sides and will create a common free trade area for almost 2 billion people.

This is reported by the European Commission.

The agreement aims to significantly strengthen economic and political ties between the EU and India amid rising geopolitical tensions. According to European Commission President Ursula von der Leyen, the parties have “created a free trade area between the world’s two largest democracies” and sent a signal about the viability of international trade rules.

Trade in goods and services between the EU and India is currently worth over €180 billion per year and supports around 800 000 jobs in the EU. The agreement is expected to double EU exports to India by 2032, and by eliminating or reducing tariffs on 96.6% of EU exports, EU companies will save almost €4 billion each year.

According to Reuters, the agreement is part of a broader wave of global trade deals. The EU recently concluded a trade pact with “Mercosur” countries and also agreed to cooperate with Indonesia, Mexico and Switzerland. India has concluded negotiations with the UK, New Zealand and Oman.

The activation of such agreements indicates the desire of the parties to diversify trade ties and reduce dependence on the US amid trade disputes and tariff threats from the Donald Trump administration, including the possible introduction of 50% tariffs on Indian goods.

India has agreed to the largest opening of its market in the history of trade agreements. In particular, duties on cars will be gradually reduced from 110% to 10%, and on auto parts will be completely abolished within 5-10 years. Duties on engineering products, chemicals and pharmaceuticals will also be significantly reduced.

A separate section of the agreement provides for support for small and medium-sized businesses by simplifying access to information and reducing regulatory barriers.

Significant changes also affect the agri-food sector — India will reduce high tariffs on European products, including wine, olive oil and processed agricultural products. At the same time, sensitive products for the EU — beef, poultry, rice and sugar — are excluded from the list, and all Indian imports must continue to meet European safety standards.

The agreement also provides for enhanced access for European companies to the Indian services market, in particular in the financial and maritime sectors, as well as a high level of protection of intellectual property rights.

A separate chapter is dedicated to sustainable development, climate policy and the protection of workersʼ rights. The EU and India also agreed to establish a joint climate platform and provided up to €500 million in European support for reducing emissions and greening the Indian economy.

• Negotiations on a free trade agreement between the EU and India began in 2007, but were suspended in 2013. The dialogue was resumed in 2022, and the final 14th round of negotiations took place in October 2025. At the same time, the parties continue negotiations on separate agreements on geographical indications and investment protection.

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