New Delhi: India and the European Union are close to finalising a long awaited free trade agreement after nearly two decades of negotiations, raising hopes of a major boost to trade and economic ties between the two sides.
Officials from both sides indicated that broad political agreement has been reached on the core elements of the pact, and an announcement is expected around the ongoing India EU summit in New Delhi. The deal is seen as one of the most ambitious trade agreements pursued by India in recent years.
The agreement aims to lower or gradually reduce tariffs on a wide range of goods. For the European Union, this includes better access for products such as cars, machinery, wine and spirits. For India, the deal promises improved entry into the European market for textiles, gems and jewellery, chemicals, electronics and other manufactured goods.
Trade in services is also a key part of the talks. India has been pushing for easier movement and market access for its information technology professionals and service providers, while the EU is seeking clearer rules and wider access in sectors such as finance, telecom and professional services.
Some sensitive areas remain carefully balanced. India has resisted deep and immediate tariff cuts in agriculture, dairy and automobiles, preferring a phased approach to protect domestic industries. The EU, meanwhile, has stressed the importance of strong standards on labour, environment and sustainability.
One major concern for India is the European Union’s carbon related trade rules, which could raise costs for Indian exporters, especially in energy intensive sectors. Indian negotiators have sought assurances that such measures will not weaken the benefits of the trade deal.
The timing of the agreement is significant. From January 2026, many Indian exports to the EU lost preferential tariff treatment under the bloc’s trade preference system, raising duties on a large share of shipments. An early implementation of the free trade pact could help offset these losses.
European Commission President Ursula von der Leyen has described the proposed agreement as historic, highlighting its role in strengthening supply chains and deepening cooperation with India. Indian Prime Minister Narendra Modi has also underlined the strategic importance of closer economic ties with Europe at a time of global trade uncertainty.
Even after a formal announcement, the agreement will still need approval from the European Parliament and EU member states. This ratification process could take a year or more before the deal comes into force.
I
If completed and implemented, the India EU free trade agreement would mark a major milestone in relations between the two partners and could reshape trade flows between one of the world’s largest economies and its biggest trading bloc.