India–EU FTA Nears Completion: What Businesses Need to Know

India and the 27-member European Union (EU) are expected to sign their highly anticipated Free Trade Agreement (FTA) by December 2026, with the landmark pact projected to come into force between February and March 2027. As the India–EU FTA Nears Completion, India's Union Commerce and Industry Minister Piyush Goyal announced the timeline during an interaction with chartered accountants in Mumbai, noting that the agreement will grant Indian businesses near-zero duty access to almost the entire European market. The announcement follows the in-principle conclusion of negotiations on 27 January 2026, marking a historic milestone for a deal frequently characterised by policymakers as the "mother of all deals".

Projected Economic Scale of the Agreement

The bilateral trade partnership represents a monumental alignment of two of the world's most prominent economic entities. Together, India and the EU account for approximately 25 per cent of global gross domestic product (GDP) and one-third of international trade.

Economic Indicator	Value / Proportion
Combined Share of Global GDP	25%
Combined Share of Global Trade	~33%
Bilateral Goods Trade (FY 2024–25)	USD 136.54 billion (INR 11.5 Lakh Crore)
Bilateral Services Trade (2024)	USD 83.10 billion (INR 7.2 Lakh Crore)
Expected Duty-Free Access for Indian Exports	~93%

Catalysing Industry and Export Growth

Under the negotiated terms, around 93 per cent of Indian shipments are expected to receive duty-free access, significantly enhancing export competitiveness. This structural tariff elimination will provide a decisive boost to Indian labour-intensive sectors, including textiles, apparel, leather, footwear, gems and jewellery, marine products, engineering goods, and automobiles. Reciprocally, the pact will ease tariffs on European imports, making high-value goods such as luxury cars and wines more accessible in the Indian market.

Legal Formalisation and Diplomatic Progress

The proposed FTA is currently undergoing rigorous legal scrutiny and procedural formalities before formal signing and implementation. Negotiations for this comprehensive partnership were ambitiously re-launched in June 2022 after a nine-year hiatus, culminating in the January breakthrough.

This momentum has been further reinforced by high-level diplomatic engagements, including discussions between Prime Minister Narendra Modi and European Commission President Ursula von der Leyen on the sidelines of the G7 Summit. The resulting framework ensures a balanced, rules-based trading environment that integrates industries into global supply chains while safeguarding the interests of domestic small businesses.