India’s newly concluded free trade agreement with the European Union will reduce import duties on a wide range of goods once it comes into force, according to an analysis released by Franklin Templeton. The agreement is expected to be implemented in early 2027 after legal vetting and ratification. Franklin Templeton’s note details which products will see the steepest duty cuts and where cost reductions are likely to show up first.
Machinery and industrial imports
Franklin Templeton said tariffs on machinery and electrical equipment imported from the EU will be removed on most product lines. Before the agreement, these tariffs went up to 44%. The firm said the move lowers the cost of importing equipment used by Indian manufacturers.
“0% on most lines lowers India’s capex/import bill on EU machinery and supports industrial modernisation,” Franklin Templeton said.
Healthcare, pharma, and medical equipment
According to the firm’s analysis, pharmaceutical imports and medical devices from the EU will see major duty cuts. Import duties on most pharmaceutical lines will go to zero, while around 90% of medical devices will also attract zero duty. Franklin Templeton said this applies to optical, medical, and surgical equipment.
“Zero duties on 90% of devices and near-zero duties on pharma lines lower input and equipment costs for healthcare providers and med-tech manufacturers,” the firm said.
Aircraft and space-related parts
Franklin Templeton said the agreement removes duties on aircraft and spacecraft parts, which previously attracted tariffs of up to 11%. The firm said this affects aviation maintenance, repair, and overhaul activities, as well as space manufacturing.
“Reduces costs for aviation Maintenance, Repair, and Overhaul and space manufacturing ecosystems,” Franklin Templeton said.
Premium cars from Europe
The report said import duties on completely built premium cars from the EU will fall sharply, though within a fixed quota. Earlier duties went as high as 110%. Under the FTA, tariffs will be reduced to 10% for up to 250,000 units per year.
“Makes premium EU cars more accessible while managing import volumes,” Franklin Templeton said.
Wine, beer, and food imports
Franklin Templeton’s analysis shows large duty cuts on food and beverage imports. Wine duties will fall from 150% to 20–30%, beer duties will be reduced to 50%, and tariffs on processed foods and olive oil will be eliminated. The firm said these changes will be phased in.
“Expands consumer choice; gradual reduction in retail prices as duties phase out,” Franklin Templeton said.
Conclusion
Franklin Templeton said the India–EU FTA will reduce import duties across capital goods, healthcare equipment, transport-related parts, and selected consumer items once it is implemented. “Once operational, the agreement is expected to significantly strengthen India’s role in global value chains and deepen economic integration with Europe,” Franklin Templeton added..