New Delhi: India and the European Union (EU) concluded the much anticipated Free Trade Agreement (FTA), bringing tariffs on several European goods — cars, wines, several food items.
The India-EU trade agreement will lower or remove tariffs on more than 90 percent of European goods including automobiles exported to India. Import duties on European beer will be reduced to 50 percent, while tariffs on chemicals, aircraft and spacecraft will be eliminated for almost all products.
India has gained preferential access to the European markets across 97% of tariff lines, covering 99.5% of trade value, in particular:
70.4% tariff lines covering 90.7% of India’s exports will have immediate duty elimination for important labour-intensive sectors such as textiles, leather and footwear, tea, coffee, spices, sports goods, toys, gems and jewellery and certain marine products, amongst others;
20.3% tariff lines covering 2.9% of India’s exports will have zero duty access over 3 and 5 years for certain marine products, processed food items, arms and ammunition, amongst others;
6.1% tariff lines covering 6% of India’s exports will have preferential access by way of tariff reduction for certain poultry products, preserved vegetables, bakery products amongst others or through TRQs for cars, steel, certain shrimps/ prawns products, amongst others.
Key labour-intensive sectors (such as textiles, apparel, marine, leather, footwear, chemicals, plastics/rubber, sports goods, toys, gems, and jewellery), comprising more than INR 2.87 Lakh Crore (USD 33 billion) of exports that are currently subjected to import duty between 4% to 26% in the EU and are crucial for employment generation, will enter zero duty from entry into force of the FTA and thus gain enhanced competitiveness in the EU market.
These sectors are poised to benefit from tariff liberalisation and enhanced competitiveness, enabling deeper integration into global and European value chains and simultaneously creating job opportunities.
The FTA is expected to have a significant positive impact on the Indian agricultural and processed food sector. Preferential Market Access for agricultural products like tea, coffee, spices, grapes, gherkins and cucumbers, dried onion, fresh vegetables and fruits as well as for processed food products will make them more competitive in the EU.
This market access will strengthen farmers’ realised incomes, reinforce rural livelihoods, and elevate the global competitiveness of Indian agricultural products.
Sectoral gains under the India–EU FTA
Agri Growth
India secures preferential market access for its agricultural exports, boosting competitiveness for processed foods, tea, coffee, spices, table grapes, gherkins and cucumbers, sheep and lamb meat, sweet corn, dried onion, and some other fruits and vegetable products.
This will strengthen rural incomes, women’s participation, and India’s position as a premium, trusted supplier in Europe.
Strategic safeguards for sensitive sectors like dairy, cereals, poultry, soymeal, certain fruits and vegetables, etc. ensure export growth while protecting domestic priorities.
Engineering Goods
With preferential market access for engineering goods presently facing tariffs as high as 22%, the FTA is expected to enhance India’s exports to the EU, which stood at approximately INR 1.44 Lakh Crore (USD 16.6 billion), and improve share in EU’s nearly INR 174.3 Lakh Crore (USD 2 trillion) engineering goods imports. The FTA is poised to empower MSME-led industrial hubs, catalysing industrial modernisation and global competitiveness.
Jobs and Growth: Labour-Intensive Industries Gain Competitiveness
Sectors like textiles, leather, footwear, marine, sports goods, toys, and gems and jewellery gain enhanced competitiveness through tariff elimination, supporting employment generation and EU market integration.
Footwear exports in Europe
India’s world-acclaimed craftsmanship and MSME innovation in leather and footwear sector, supporting significant employment, is poised to unprecedented leap onto Europe’s stage.
Elimination of tariffs at entry into force of the FTA from up to 17% to zero across all tariff lines will help level the playing field for India’s exports to EU, valued at approximately INR 20.9 Thousand Crore (USD 2.4 billion) and improve share in EU’s nearly INR 8.71 Lakh Crore (USD 100 billion) leather and footwear imports. Regulatory alignment, simplified compliance, and support for design-led, sustainable products will enable a shift from low-margin production to value-added global leadership.
Marine Exports
Preferential access covering 100% of trade value, by reducing tariffs of up to 26% will unlock the EU marine market for imports (INR 4.67 Lakh Crore (USD 53.6 billion)). This enhanced market access is expected to significantly improve the competitiveness of India’s marine exports, while complementing and strengthening India’s export capacity in the marine sector, currently valued at INR 8,715 Crore (USD 1 billion) to the EU. The FTA will turbo-charge exports of shrimp, frozen fish, and value-added seafood exports, empowering coastal communities in Andhra Pradesh, Gujarat, Kerala, and beyond and India’s blue economy.
Medical Instruments, Appliances, and vital Supplies
India’s medical Instruments, Appliances, and vital Supplies built on cutting-edge manufacturing, innovation, and skilled talent is set for a quantum leap in the EU. Tariffs of up to 6.7% eliminated across 99.1% of trade lines, enabling cost-competitive entry in European markets for lenses, spectacles, medical devices, measuring and testing instruments.
Jewellery Export
The gems and jewellery sector, a blend of artistry, MSME entrepreneurship, and heritage craftsmanship, becomes more competitive in the EU market. From tariffs of up to 4% previously to gaining preferential access across 100% of trade value, India’s INR 23.5 thousand Crore (USD 2.7 Billion) jewellery exports become competitive through the FTA in INR 6.89 Lakh Crore (USD 79.2 billion) import market.
Textiles & Apparel
Gaining zero duty access in textiles and clothing, covering all tariff lines and reducing tariffs by up to 12%, would open up the EU’s INR 22.9 Lakh Crore (USD 263.5 billion) import market. Building on India’s current INR 3.19 Lakh Crore (USD 36.7 billion) in global textile and apparel exports, including INR 62.7 Thousand Crore (USD 7.2 billion) to the EU, such access would significantly expand opportunities, particularly in yarn, cotton yarn, cotton yarn, man-made fibre apparel, Ready-Made Garments, men’s and women’s clothing and home textiles. This would enable MSMEs to scale, generate employment, and reinforce India’s positioning as a reliable, sustainable, and high-value sourcing partner.
Plastics & Rubber exports
India’s plastic and rubber industries will gain preferential access to the EU, a market with global imports valued at INR 27.67 Lakh Crore (USD 317.5 billion). With India’s current exports to the EU at INR 20.9 thousand Crore (USD 2.4 billion) and total global exports of INR 1.13 Lakh Crore (USD 13 billion), this access underscores substantial scope for growth. Enhanced access under FTA combined with India’s skilled manufacturing workforce and MSME-driven innovation, positions the country to increase employment, boost exports, and strengthen its global trade profile.
Chemicals
FTA ensures zero duty on 97.5% of India’s chemical export basket by value, eliminating duties of up to 12.8% and boosting competitiveness across inorganic, organic, and agrochemicals. The FTA is expected to expand exports, strengthen MSME-led clusters and promote high-value, sustainable, and technologically advanced products, positioning India as a trusted supplier to EU’s nearly INR 43.57 Lakh Crore (USD 500 billion) chemical market for imports.
Mines and Minerals
Zero duty across 100% of tariff lines breaks cost barriers, ensuring India exports quality, reliable, and value-added minerals to the EU. The FTA unlocks opportunities to scale India’s presence in Europe’s high-value markets, while long-term, predictable access fuels partnerships with European manufacturers in steel, electronics, automotive, and renewable energy.
Home Décor, Wooden Crafts and Furniture
Lower duties of up to 10.5% provides enhanced access, boosting the competitiveness of Indian wooden, bamboo, and handcrafted furniture. The FTA supports growth in high-value, design-oriented segments and strengthens India’s role in global furniture supply chains.
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