India and the EU signed a long-awaited Free Trade Agreement on Tuesday. This agreement marks the end of nearly two decades of negotiations and creates one of the world’s largest trading blocs. It covers around 2 billion people and nearly 25 percent of global GDP.
India and EU sign free Trade Agreement deal
Prime Minister Modi described the pact as historic. He noted the coincidence of the agreement signed with 27 EU member states on January 27. EU President Ursula von der Leyen called the deal “the mother of all trade agreements.”
European Council President Antonio Costa emphasized the need for India and the EU to cooperate for shared prosperity and security.
Legal review will take 5 to 6 months more
The Trade Agreement will need official ratification, a process expected to take about six months. The legal review is currently happening to ensure consistency and should take five to six months. The FTA expected to take effect in early 2027.
According to the agreement, India will eliminate or significantly reduce tariffs on most EU goods by value. Import duties on European cars drop from 110 % to 40 %, and high tariffs on wines and spirits will also be reduced.
At the same time, Indian sectors that rely on labor, such as textiles, gems and jewelry, leather, and chemicals, will receive duty-free or preferential access to the EU market. Sensitive areas like agriculture and dairy mostly excluded from the pact to protect domestic producers.
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