After nearly 20 years of stop-start negotiations, India and the European Union have finally concluded what both sides agree is a transformational free trade agreement (FTA)—one that not only reshapes tariffs and market access but also repositions the India–EU partnership in a rapidly fragmenting global economy.
European Commission President Ursula von der Leyen captured the scale of the moment by calling it “the mother of all trade deals”, while Prime Minister Narendra Modi described it as the largest FTA in India’s history and a “new blueprint for shared prosperity.” Signed alongside European Council President Antonio Costa, the agreement brings together two of the world’s biggest democratic trading blocs—representing nearly 25% of global GDP and a market of almost two billion people.
The timing of the pact is as significant as its scale. Europe is actively seeking to reduce strategic dependence on the US and China, while India is consolidating its position as the fastest-growing major economy and a critical node in global supply chains. The disruptions of COVID-19, the Russia–Ukraine war, and renewed trade protectionism globally have pushed both sides to accelerate talks that had stalled since 2016.
Negotiations, first launched in 2007, collapsed over disagreements on agriculture, dairy, and market access. When talks resumed in 2022, the geopolitical calculus had changed—and compromise became imperative.
At the core of the agreement lies a decisive shift in India’s tariff regime for European agri-food products. Until now, high import duties—averaging 36% and climbing to 150%—have acted as a near-impenetrable barrier for European exporters.
In 2024, EU agri-food exports to India were worth just €1.3 billion, accounting for only 0.6% of the EU’s total agri-food exports—a striking mismatch between India’s market size and Europe’s limited access. The FTA seeks to correct this imbalance.
According to the European Commission, the agreement delivers “unmatched market access”, surpassing the concessions India has granted under its FTAs with the UK and Australia.
The most eye-catching changes are in alcoholic beverages—long considered one of the most protected segments of India’s import regime:
Wine tariffs, currently as high as 150%, will fall to 20% for premium wines and 30% for mid-range wines
Spirits duties will drop to 40%
Beer tariffs will be reduced from 110% to 50%
For European producers, this finally opens a door to India’s growing urban, premium-consuming middle class. For Indian consumers, it promises greater choice and more competitive pricing—particularly in the hospitality and luxury retail segments.
The agreement goes much further than wines and spirits. Import duties will be eliminated or sharply reduced across a wide spectrum of agri-food products:
Zero duty on olive oil, margarine, vegetable oils, fruit juices, non-alcoholic beer, and processed foods such as bread, biscuits, pasta, chocolate, and pet food
Kiwis and pears will see duties reduced from 33% to 10% within quota limits
Sheep meat tariffs will be reduced to zero
Sausages and meat preparations will face duties cut by half, to 50% from as high as 110%
These changes are expected to significantly improve EU competitiveness in the Indian market while expanding options for Indian consumers and food processors.
Despite the scale of tariff cuts, the European Commission has emphasised that the deal does not come at the cost of vulnerable sectors. Both sides have carved out protections to prevent market disruption.
The EU will retain existing tariffs on sensitive products including beef, sugar, rice, chicken meat, milk powder, honey, bananas, wheat, garlic, and ethanol. It will also open calibrated quotas for imports of sheep and goat meat, grapes, cucumbers, dried onions, sweetcorn, molasses-based rum, and starches.
A bilateral safeguard mechanism allows either side to temporarily reintroduce measures if imports surge in a way that threatens domestic markets—an important reassurance for farmers and policymakers alike.
Addressing concerns over food quality and safety, the Commission was unequivocal: “EU health is not negotiable.” All Indian products entering the EU will continue to be subject to strict, science-based standards covering human, animal, and plant health.
The EU will retain full autonomy over its food safety rules, conduct impact assessments on pesticide use and animal welfare, and step up audits and border controls where necessary. This insistence on regulatory integrity is central to building long-term trust between the two markets.
Parallel to the FTA, India and the EU are negotiating a Geographical Indications (GI) agreement, aimed at protecting iconic European food products from imitation in the Indian market. This is particularly important for products whose value lies in regional identity and traditional methods.
In addition, the agreement establishes an EU–India working group on wines and spirits, facilitating cooperation, technical dialogue, and information exchange—including on oenological practices.
Leaders on both sides have been clear that the FTA is not just about tariffs. It is a pillar of a broader strategic partnership encompassing defence cooperation, green energy, climate action, supply chain resilience, and geopolitical stability.
Costa described India and the EU as partners shaping “a resilient global order that enables peace and stability,” while von der Leyen underlined that India’s rise contributes to global security.
For India, the deal strengthens access for sectors such as textiles, gems and jewellery, leather goods, steel, and manufacturing, while enhancing its credibility as a long-term, rules-based trading partner.
As protectionism rises elsewhere, the India–EU FTA stands out as a statement in favour of open, balanced, and rules-based trade. It reflects a recognition that economic growth, strategic autonomy, and geopolitical influence are now deeply intertwined.
In Prime Minister Modi’s words, “This is not just a trade agreement—it is a blueprint for mutual growth.” With tariff walls coming down and cooperation widening, the pact marks the beginning of a new chapter in India–Europe relations, one that could redefine economic engagement between the Global South and advanced economies in the years ahead.