In January 2026, the European Union and India concluded a new Free Trade Agreement (FTA). As of February, the agreement is awaiting formal approval by the European Parliament, the Council of the EU, and the Indian parliament. The FTA is designed to reduce and remove trade barriers, strengthen supply chains, and reduce dependency on other major global economies.
The agreement will eliminate import duties on 96.6% of EU exports to India and 99.5% of Indian imports into the EU, significantly improving EU–India trade conditions. For most European exports to India, tariffs will be phased out gradually, resulting in significant cost reductions for European exporters. The European Commission estimates that EU exports to India could double by 2032 because of this agreement.
Key tariff reductions for EU exports to India include:
• Cars: import duties reduced from 110% to 10%
• Auto parts: tariffs phased out completely
• Machinery: tariffs of up to 44% largely eliminated
• Selected food products: average tariffs of 36% reduced
• Chemicals: tariffs of around 22% mostly removed
• Pharmaceutical product: tariffs reduced from approximately 11%
Key tariff reductions for Indian exports to the EU include:
• Textiles and clothing: reduced or eliminated import duties
• Rubber products: lower tariffs
• Leather goods: reduced import duties
• Base metals: improved tariff conditions
• Chemicals: lower import tariffs
• Jewelry: improved market access through tariff reductions
While India will gain improved access to the European services market, sensitive agricultural products, including dairy, soy, beef, sugar, and rice, are excluded from EU–India Free Trade Agreement.
EU–India trade is entering a new phase, creating new opportunities for exporters, importers, and international supply chains. BTS Logistics is ready to move.