The India-EU free trade agreement is likely to be announced next week as top leaders visit New Delhi for a joint summit. The update came even as the European Union suspended various export benefits to various sections under a preferential scheme. The Commerce Ministry had insisted that the decision would not impact Indian exports to the 27-nation bloc.
According to the EU Official Journal, rules had been laid down in late September last year in connection with the suspension of certain tariff preferences. The update would apply from the beginning of January 2026 to December 28 for three GSP beneficiary countries: India, Indonesia and Kenya.
The Global Trade Research Initiative had tagged it a “major setback” for India in the EU market — noting that 87% of its exports would have to pay a higher import tariff following the suspension of GSP or Generalised Scheme of Preferences benefits. The think tank added that only about 13% of exports — including agriculture and leather — would now retain benefits under this scheme.
Commerce Ministry downplays impact
But the commerce ministry has insisted that the change will not have any major impact on Indian exports to the European Union. It noted in an official statement that the 27-nation group had progressively suspended GSP tariff preferences for India across products, such as minerals, chemicals and textiles from 2016. This was widened further in 2019 as well as 2023.
“The same list was extended as per regulations released on December 1, 2025. From January 1, GSP preferential duties will be suspended for the same list of products until December 31, 2028,” the ministry said.
India-EU FTA next week?
According to a Reuters update quoting government sources, the two countries are expected to announce the conclusion of protracted negotiations on Tuesday. The announcement could follow Prime Minister Narendra Modi‘s meeting with European Council President Antonio Costa and European Commission President Ursula von der Leyen. The three leaders will co-chair an India-EU summit during their visit to India from January 25 to 28.
The trade pact will have to be formalised once talks conclude — before being ratified by the European Parliament. The process is likely to take at least a year before the pact can be implemented. Negotiations were relaunched in 2022 after a nine-year pause, gaining traction last year amid rising trade tensions.