The European Union and India have concluded a landmark free trade agreement (FTA), creating a trade zone of nearly 2 billion people and aiming to double EU goods exports to India by 2032. The historic deal, announced on January 27, 2026, after negotiations resumed in 2022 following a stall since 2013, is one of the most ambitious ever for both partners, according to Pinsent Masons and the European Commission.
Under the agreement, the EU will eliminate or reduce tariffs on 96.6% of its exports to India, which is expected to save European companies around €4 billion in duties annually. In a significant move, India will grant the EU tariff reductions that no other trading partner has received. Key European sectors will see substantial benefits. Tariffs on automotive exports, currently as high as 110%, will gradually decrease to 10%. Duties on wine and spirits will be cut from 150% to 75% initially, and eventually to 40%. Tariffs will also be significantly cut or eliminated for machinery, pharmaceuticals, and chemicals.
In return, the EU will eliminate tariffs on 99.5% of Indian goods, with 90.7% of India’s exports gaining zero-duty access immediately upon implementation. This provides a major boost for key Indian sectors like textiles, apparel, leather, jewelry, and marine products. The comprehensive agreement also includes provisions for services, intellectual property, and the protection of geographical indicators. According to Sciences Po, the deal is seen as a strategic turning point for both partners. The European Commission will now submit the proposal to the European Council for signature and conclusion before the European Parliament gives its final consent.
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