EU Commission takes crucial step to finalise India-EU free trade deal with India

The European Commission on Friday forwarded to the European Council its proposals for the signing and conclusion of the India-European Union (EU) free trade agreement (FTA), a crucial step in plans to conclude the pact by the year-end.

The India-EU FTA, concluded in January, will cut tariffs on 96% of EU goods exports to India and is expected to enter into force in early 2027. (@pmoindia)India and the EU concluded negotiations for the FTA – described by both sides as the “mother of all deals” – in January this year, after resuming the talks in 2021 following a hiatus of almost a decade.

Prime Minister Narendra Modi is expected to visit Brussels at the end of the year for the formal signing of the FTA. “If authorised by the Council, this will be the largest trade agreement ever concluded by both the EU and India,” the European Commission said in a statement.

Following its signing, the FTA will have to be cleared by the European Parliament for entry into force. Indian authorities are carrying out their own internal ratification procedures. Once the FTA is adopted and enters into force, which is expected to happen early in 2027, the agreement will improve market access, reduce tariffs, tackle unnecessary barriers to trade, and provide predictable rules for trade and investment between the EU and India.

The European Commission, which is the EU’s main executive body that proposes legislation and upholds EU treaties, said the proposal put forward on Friday is a key step to ensure that consumers and businesses can reap the benefits of the FTA as soon as possible.

The move is also in line with the fast-track procedure laid out by the EU commissioner for trade and economic security, Maroš Šefčovič, that aims to speed up the implementation of FTAs amid “geopolitical uncertainty and growing pressure on the global trading system”.

The European Council defines the EU’s overall political direction, and its members include the heads of state or government of the 27 EU member states, the European Council President and the European Commission President.

The European Commission said the FTA also reflects the EU’s commitment to strengthen economic ties with key partners in the Indo-Pacific. “Timing matters, which is why we are now following through by submitting our proposals to the Council for signature and conclusion in record time.

This agreement brings together two of the world’s largest economies – a market of two billion people and around a quarter of global GDP,” Šefčovič said. India-EU trade in goods and services is currently worth more than €180 billion a year, and the FTA will eliminate or reduce tariffs on 96% of EU goods exports to India.

Tariff reductions will save around €4 billion a year in duties on European products. India is the EU’s 9th largest trading partner for goods globally, and the 6th for trade in services. Bilateral trade in goods was worth €118 billion in 2025.

India’s main exports to the EU include machinery, appliances, chemicals, textiles, metals and petroleum products. The EU’s exports to India are dominated by industrial products, transport equipment and chemical products.

Two-way trade in services amounted to €67 billion in 2025, with EU exports amounting to €29.2 billion and imports pegged at €37.8 billion. In 2024, the EU’s foreign direct investment stock in India amounted to €132.8 billion, while India’s FDI stock in the EU was €13.7 billion.

The majority of trade will be liberalised at entry into force, while there will be transition periods of three, five or seven years for certain goods, or, in the case of partially liberalised tariff lines, specific modalities.

The FTA also aims to foster cooperation and help remove technical barriers to trade in goods. It will create a more transparent, predictable, and cost-effective environment, enhanced market access and reduced costs. Rezaul Hasan Laskar is Foreign Editor with the Hindustan Times, which he joined in 2015.

He began as a journalist in his hometown of Shillong in northeast India and has worked in newspapers and wire services over the years. He moved to New Delhi in 1997 and initially focused on defence, national security, Jammu and Kashmir and the northeast, while also working of foreign policy and international relations.

He has been part of the media delegation accompanying PMs on foreign visits and has reported from destinations ranging from Tibet to Ukraine. Between 2007 and 2013, he was the Press Trust of India correspondent in Pakistan, one of only two Indian journalists allowed to report from the country.

He extensively covered Pakistan’s domestic politics and the life of the common people, as well as the fallout of the 2008 Mumbai attacks on India-Pakistan relations and the subsequent trial in Pakistan of the suspects involved in the attack.

As part of his reportage in Pakistan, he travelled the breadth of the country, from the Swat Valley to Balochistan. Reza’s first gig in journalism was writing a weekly music column, and music – especially classic rock – remains a keen interest.

He is also a movie buff and a keen photographer.Read More