India and the European Union have finally signed a free trade agreement (FTA) after 18 years. The pact gives India access to the EU market, with more than 99% of its exports by trade value eligible for preferential treatment.
Labour-intensive sectors get immediate duty-free access
Under the agreement, India will get preferential access across 97% of EU tariff lines, covering 99.5% of its export value.
Of this, 70.4% of tariff lines, accounting for 90.7% of India’s exports to the EU, will see import duties eliminated immediately once the FTA comes into force.
Another 20.3% of tariff lines, covering 2.9% of exports, will move to zero duty over a period of three to five years.
A further 6.1% of tariff lines will get tariff reductions or tariff rate quotas for select products such as poultry items, preserved vegetables, bakery products, cars, steel and certain seafood items.
1. Textiles, leather and marine exports to enter EU duty-free
Labour-intensive sectors, such as textiles, leather, footwear, tea, coffee, spices, sports, marine products etc, accounting for exports worth more than Rs 2.87 Lakh Crore will benefit from zero duty access from day one.
These sectors currently face EU import duties ranging from 4% to 26%. The government expects this to significantly improve competitiveness in the EU market and generate employment, especially through MSMEs.
2. Services trade gets a major push
The EU has committed market access across 144 services subsectors, including IT and IT-enabled services, professional services, education and other business services.
India has offered access in 102 services subsectors covering EU priorities such as telecommunications, financial services, maritime, environmental and professional services.
The agreement ensures certainty of market access, non-discriminatory treatment and a strong focus on digitally delivered services.
3. Boost for jobs and MSMEs
The agreement also provides Indian businesses with greater certainty, allowing them to plan long-term investments and integrate more deeply into European value chains amid global economic uncertainty.
4. Mobility framework to ease movement of professionals
The agreement also creates a predictable framework for mobility. It covers intra-corporate transferees, business visitors, contractual service suppliers and independent professionals across multiple sectors.
Provisions also include entry and work rights for dependents of intra-corporate transferees, student mobility and post-study work opportunities.
5. Agri sector interest protected
On Agriculture sector, government in a PIB release said, India has protected sensitive sectors. It said there will be no market access for dairy products, and safeguards remain in place for cereals, poultry, soymeal and select fruits and vegetables.
India-EU trade in 2024, 2025
Bilateral merchandise trade between India and the EU stood at approximately Rs 11.5 Lakh Crore ($136.54 billion) in 2024-25. India exported goods worth around Rs 6.4 Lakh Crore ($ 75.85 billion) to the EU during the year. Trade in services between the two sides reached INR 7.2 Lakh Crore ($83.10 billion) in 2024.