India-EU FTA highlights | When will the trade agreement come into effect? Piyush Goyal answers

India and the European Union on Tuesday signed a Free Trade Agreement that opens up preferential access to each other’s markets by removing tariffs on a large share of goods traded between the two sides. To ensure the benefits begin flowing quickly, both partners are working to fast-track the procedural steps needed to make the pact operational within the current calendar year.

Commerce and Industry Minister Piyush Goyal said the agreement will be sent for legal scrubbing on a priority basis, with the text being translated simultaneously into 24 languages. “We hope the agreement can enter into force within calendar 2026,” he told reporters.

The pact was signed by Goyal and EU Commissioner for Trade and Economic Security Maros Sefcovic. Once the legal text is finalised, the agreement will need to be ratified by authorities on both sides before it can formally take effect.

After the FTA, India’s plastic and rubber sectors are set to benefit from preferential access to the European Union, a vast market with global imports worth about ₹27.67 lakh crore ($317.5 billion). At present, India exports roughly ₹20.9 thousand crore ($2.4 billion) worth of plastic and rubber products to the EU, against total global exports of around ₹1.13 lakh crore ($13 billion).

Improved market access under the free trade agreement, coupled with India’s skilled manufacturing base and innovation led by micro, small and medium enterprises, is expected to help scale up exports, create jobs and strengthen India’s standing in global trade, the government said.

India is likely to steadily expand its presence in the European Union’s ready-made garment (RMG) market, with its share projected to rise from about 5 per cent to nearly 8–9 per cent over the medium term. This shift could translate into additional annual exports worth roughly $4–4.5 billion, according to a report released on Tuesday.

The EU remains the world’s largest market for ready-made garments, importing close to $84 billion worth of apparel in 2024, excluding trade within the bloc, the CareEdge Ratings report said. At present, India exports around $4.5–5 billion of RMG to the EU, accounting for about 5 per cent of the market. In contrast, major competitors such as Bangladesh, Turkey, Vietnam, Pakistan and Cambodia already benefit from duty-free access.

The report highlighted that the India–EU free trade agreement is crucial for boosting the competitiveness of Indian garment exporters. Dubbed the “mother of all trade deals”, the agreement is expected to level the playing field for Indian firms in a market that is projected to touch $105 billion in the near future and has already reached $94 billion in the first 11 months of calendar year 2025.

Once the pact is fully rolled out by 2027, India is expected to enjoy a 12 per cent tariff advantage over China, which currently dominates the EU’s RMG imports with a market share of nearly 30 per cent, the report added.

Europe’s strength in advanced healthcare technologies is expected to translate into tangible benefits for Indian patients following the India–EU trade agreement. The pact is set to lower import duties on medicines used to treat cancer and other critical illnesses, as well as on high-end medical equipment sourced from Europe, potentially easing treatment costs across India’s healthcare system.

Reduced tariffs on specialised drugs, including certain cancer therapies, biologics and newer weight-loss medications manufactured in Europe, are likely to bring down their landed cost, making them cheaper for hospitals and distributors to procure. Many cutting-edge treatments, such as immunotherapies and enzyme replacement therapies, are produced largely in Europe, and lower duties could improve their availability in India while reducing procurement expenses for hospitals.

The agreement may also ease pressure on public healthcare budgets, particularly for government-run health schemes that buy medicines in bulk. At the same time, the deal opens up access for Indian-manufactured medicines to 27 European markets, strengthening India’s position as a global pharmaceutical supplier.