India-EU FTA FAQs: From overall benefits for New Delhi, Brussels to key mobility related gains, here's all

A Landmark Deal After Years of Talks

Negotiations for the India-EU Free Trade Agreement stretched over nearly two decades, with ups and downs along the way, before reaching a breakthrough at the 16th India-EU Summit on January 27, 2026. This pact connects India to a massive trading bloc of 27 countries and over 450 million consumers, reshaping global supply chains amid shifting world trade dynamics. It's not just about slashing tariffs; it's about India weaving itself into a diversified network that lessens dependence on any one partner. India's key exports like manufactured goods and energy will flow more freely into Europe, while imports of high-tech items such as aircraft parts and nuclear reactor components get a boost too. The agreement eliminates or reduces duties on the vast majority of goods, with India cutting tariffs on 93% of EU imports by value and the EU doing the same for 99% of Indian exports. This opens doors wide for labor-intensive Indian industries hungry for new markets.

The deal balances ambitions on both sides, covering around 97% of tariff lines overall when partial liberalizations are factored in. For the EU, it targets India's high duties on industrial products averaging over 16%, like chemicals up to 22% and car parts phased out over 5 to 10 years. Agri-food gets careful handling too, with EU exports like olive oil facing up to 45% tariffs now set for quick elimination, alongside fruit juices and processed foods. India protects its sensitive farm sectors while gaining ground elsewhere. Leaders hailed it as monumental—EU Commission President von der Leyen called it the “mother of all deals,” and Indian Prime Minister Modi described it as India's largest FTA ever, paving paths for farmers, small industries, manufacturing, and services.

Key Wins for India and the European Union

Indian sectors stand to thrive under this agreement. Textiles and apparel get zero duties across all lines from the EU, slashing up to 12% tariffs and leveling the playing field against rivals like Bangladesh and Vietnam. Leather and footwear exports see full tariff elimination from up to 17%, while marine products benefit from cuts up to 26% on 100% of trade value. Chemicals gain zero duty on 97.5% of exports, medical instruments nearly all lines duty-free, and jewellery plus home decor items like wooden crafts enjoy broad reductions. The EU, meanwhile, eyes gains in agri-food, pharmaceuticals, machinery, and autos, with India easing access to its vast market. High tariffs on EU cars drop from 110%, machinery from 44%, and steel from 22%. Digital payments get a lift too, with opportunities for Indian providers like those behind UPI to expand, plus EU banks gaining branch access—15 over four years—and full FDI in insurance.

This agreement will facilitate access to the European market for our farmers and small industries, create opportunities in manufacturing, and strengthen cooperation in our services sectors, said Prime Minister Narendra Modi, underscoring the deal's broad impact.

Both sides commit to 102 subsectors in services, from telecom to environmental, fostering deeper ties. Intellectual property gets a TRIPS-aligned upgrade, spurring collaboration in AI and clean tech. Sustainability shines through with nods to the EU's Carbon Border Adjustment Mechanism, offering technical aid, carbon price recognition, and emission reduction support for Indian firms. Most Favored Nation clauses kick in for five years, ensuring fair play if better terms are granted elsewhere.

Mobility Gains and Broader Implications

One standout feature is the mobility framework, easing movement for professionals between India and EU nations. Intra-Corporate Transferees and Contractual Service Suppliers in fields like software, R&D, education, and IT-enabled services face fewer visa barriers. An Indian IT consultant on a European project or an engineer heading to a German factory can now navigate red tape more smoothly. This expands opportunities in professional services, directly benefiting India's skilled workforce. The pact also simplifies customs, boosts fintech innovation, and opens financial services like maritime transport. For the EU, India's commitments in banking and insurance signal trust and openness. Overall, this FTA positions both as strategic partners in a fragmented global economy, promising jobs, growth, and innovation.

In wrapping up, the India-EU FTA delivers tariff relief on nearly all goods, sector-specific boons for textiles, chemicals, and more, plus vital mobility for professionals and sustainability cooperation. It balances protection with opportunity, heralding stronger economic bonds.