The European Union (EU) and India have struck a landmark trade agreement expected to lift flows between the two economies, with officials projecting stronger growth in goods movement and deeper market access across key sectors.
Announced at the 16th EU–India summit in New Delhi, the pact was signed by European Commissioner for Trade Maroš Šefčovič and India’s Commerce Minister Piyush Goyal, in the presence of European Commission President Ursula von der Leyen and Indian Prime Minister Narendra Modi.
The deal, described by Goyal as a "win-win" for both sides, is slated for implementation this year and promises unprecedented market access for more than 99% of India's exports.
EU leaders emphasized that the agreement strengthens the strategic partnership at a time of shifting global trade dynamics, while Indian officials framed it as a breakthrough in positioning India’s economy for long-term growth.
Flexport said in a new analysis that the trade deal will reduce duties on most goods over a phased period of several years. The agreement follows nearly two decades of trade talks, and is expected to take effect by the end of 2026.
It noted that India will reduce or eliminate tariffs on 96.6% of EU exports by value over a phased period, potentially doubling EU exports to India by 2032.
The EU will reduce or eliminate tariffs on 99.5% of Indian exports by value over a phased period. Upon the implementation of the agreement, the EU intends to immediately eliminate duties on Indian textiles, footwear, tea and coffee, and other labor-intensive goods.
Meanwhile, India will gradually reduce its 110% duty rate on EU-origin motor vehicles to 10%, applicable to an annual quota of 250,000 EU vehicles.
New Delhi will also reduce or eliminate prohibitive tariffs (i.e., above 36%) on certain EU agri-food products, including wine and olive oil. India will also eliminate tariffs on nearly all EU machinery, medical equipment, iron and steel, and more.
The deal comes amid a number of trade developments and ongoing negotiations with the U.S.
Last week, U.S. President Donald Trump announced plans to impose a 10% tariff on eight European trading partners due to a perceived lack of cooperation in the U.S.'s quest to purchase Greenland, but later called off the tariff after announcing a deal framework on Greenland that he had struck with NATO.
And last August, President Trump also imposed an additional 25% tariff on India over its purchases of Russian oil, bringing the total tariff rate on India to 50%.
India-UK trade deal
In July 2025, India also concluded a landmark free trade agreement with the United Kingdom, underscoring its broader strategy of deepening global economic ties.
The deal, signed after more than three years of negotiations, was hailed as Britain's most significant bilateral accord since leaving the European Union. It eliminates tariffs on the majority of UK goods sold in India—including whisky, food products, and electrical devices—while opening Indian exports to British markets on preferential terms.
UK officials projected the agreement could add tens of billions of dollars to bilateral trade over the coming decades, while Indian leaders framed it as a pivotal step in positioning the country's economy for long-term growth.
Taken together with the EU pact, the UK–India deal highlights New Delhi's dual-track approach to securing diversified partnerships and expanding market access across Europe.