The India–European Union free trade agreement: concluded after nearly two decades

On 27 January 2026, at the 16th India–European Union Summit in New Delhi, India and the European Union concluded negotiations on a free trade agreement that had been in the works, on and off, since 2007. Talks began that year as a broad-based trade and investment agreement, stalled in 2013, and were relaunched in 2022 alongside parallel negotiations on investment protection and geographical indications. The conclusion was described by India's Commerce Ministry as the mother of all deals: the two sides together cover almost two billion people and roughly a quarter of global gross domestic product.

The headline terms are asymmetric by design. India will eliminate or reduce tariffs on 96.6 per cent of European Union exports by value, while the European Union will reciprocate on 99.5 per cent of Indian goods, according to figures reported from the agreement. The European Commission projects about 4.7 billion dollars in annual duty savings, and has said bilateral exports could double by 2032. The European Union will phase out tariffs on most Indian goods over seven years, while India's reductions stretch over ten years. Bilateral trade in goods already stood at 136.54 billion dollars in 2024–25, making the European Union one of India's largest trading partners.

Two hard issues shaped the negotiation. One was the European Union's carbon border adjustment mechanism, which puts a carbon price on imports of emissions-intensive goods and which Indian exporters feared would blunt their tariff gains. The other was agriculture and automobiles, where both sides protected sensitive sectors: India kept protections for dairy and several farm products, while the European Union guarded its own farm interests. Services, digital trade, intellectual property and supply-chain diversification are also covered, reflecting a modern agreement rather than a simple tariff-cutting pact.

Conclusion is not the same as entry into force. The text still requires legal vetting, signature and ratification on the European side, including approval by the Council of the European Union and consent from the European Parliament, and completion of India's domestic procedures. Reporting in 2026 put entry into force in early 2027. At the same January summit the two sides also signed a Security and Defence Partnership covering maritime security, cyber issues, counter-terrorism, space and defence industry cooperation, signalling that the trade deal sits inside a wider strategic partnership.