European Commission wants early implementation of India-EU Free Trade Agreement
New Delhi, Sept 11: The European Commission has urged the European Union (EU) to approve and conclude its free-trade agreement with India, taking the long-awaited pact closer to implementation.
The EU and India started negotiating the agreement in 2007, but the talks were suspended in 2013. Negotiations resumed in 2022 and were concluded in January 2026, ending a prolonged process to finalise the trade pact.
The agreement could take effect by the end of 2026 or in the first half of 2027, depending on the approval process. The European Commission’s proposal must first be authorised by the Council of the EU and then receive the consent of the European Parliament.
The proposal now needs to clear the EU’s approval process before the agreement can take effect.
The Commission said today that the agreement, once approved, would be the largest trade deal ever concluded by either the EU or India.
The pact seeks to expand market access, lower trade barriers and provide businesses on both sides with more predictable regulatory conditions.
The agreement would remove or reduce tariffs on 96 percent of EU goods exports to India. The Commission estimates that the move could save European exporters around €4 billion a year in customs duties while improving their access to the Indian market.
India is also advancing its domestic approval process for the agreement. The proposal comes as the EU seeks to accelerate trade agreements amid rising geopolitical tensions and increasing pressure on global commerce.
Trade in goods and services between the EU and India now exceeds Euro 180 billion a year, supporting nearly 800,000 jobs in the bloc, according to the European Commission. India is the EU’s ninth-largest trading partner for goods, highlighting the importance of the bilateral economic relationship.
Two-way merchandise trade reached euro 118 billion in 2025, with machinery, transport equipment and chemicals accounting for a significant share of EU exports to India. India’s major exports to the EU include machinery, chemicals, textiles, metals and refined petroleum products.
Trade in services between the EU and India totalled euro 67 billion in 2025. EU imports of services from India stood at euro 37.8 billion, while EU exports of services to India were valued at euro 29.2 billion during the year.
Investment ties are also significant between the two economies. EU foreign direct investment stock in India stood at euro 132.8 billion in 2024, compared with euro 13.7 billion of Indian FDI stock in the EU.
The EU and India are also negotiating separate agreements covering geographical indications and investment protection. These discussions are taking place alongside the free-trade agreement and could further shape the broader economic relationship between the two sides.
India currently receives tariff benefits on some exports under the EU’s Generalised Scheme of Preferences. However, several Indian sectors have graduated from the scheme as their competitiveness has increased, leaving around 38 per cent of India’s exports to the EU eligible for preferential tariffs. (BVI)
