India and the European Union (EU) have concluded negotiations for a Free Trade Agreement (FTA), marking a pivotal step in one of India’s most strategic economic partnerships. Designed as a modern, rules-based trade framework, the FTA strengthens market integration between the world’s 4th and 2nd largest economies, covering a combined market worth over INR 2,091.6 Lakh Crore (USD 24 trillion).

The FTA provides market access for more than 99% of India’s export value while preserving policy space for sensitive sectors and reinforcing developmental priorities. Bilateral merchandise trade stood at INR 11.5 Lakh Crore (USD 136.54 billion) in 2024-25, yet significant untapped potential remains. The agreement creates a stable and predictable environment for Indian exporters and MSMEs to integrate into European value chains, ensuring long-term competitiveness.

Labour-Intensive Sectors Gain Competitiveness
India gains preferential access to 97% of tariff lines covering 99.5% of trade value with the EU. For key labour-intensive sectors such as textiles, apparel, leather, footwear, sports goods, toys, gems, jewellery, and marine products, 70.4% of tariff lines covering 90.7% of exports will see immediate duty elimination.

These sectors, contributing over ₹ 2.87 Lakh Crore (USD 33 billion) in exports, will benefit from tariff liberalisation, enabling deeper integration into European value chains and generating substantial employment opportunities.

Agricultural Growth and Rural Livelihoods
The FTA provides preferential access for agricultural and processed food exports, including tea, coffee, spices, grapes, gherkins, and dried vegetables, boosting competitiveness in the EU market. This access strengthens farmers’ incomes, supports rural livelihoods, and enhances India’s global positioning as a premium supplier.

At the same time, strategic safeguards protect sensitive sectors like dairy, cereals, poultry, and certain fruits and vegetables, balancing export growth with domestic priorities.

Services and Professional Mobility
Services, a major growth driver for both economies, will benefit from deeper commitments across 144 subsectors including IT, professional services, education, and business services. India’s competitive high-tech services are expected to expand exports while supporting EU businesses.

The FTA also introduces a mobility framework for professionals, including business visitors, intra-corporate transferees, contractual service suppliers, and independent professionals, covering 37 subsectors. This framework ensures smoother talent flow, eases social security integration, and promotes post-study work opportunities for Indian students in the EU.

Boosting Traditional Medicine and Innovation
The agreement supports Indian traditional medicine (AYUSH) practitioners, allowing them to provide services in EU markets where regulations do not exist. It also reinforces intellectual property rights, technology transfer, and innovation while strengthening SPS (Sanitary and Phytosanitary) and TBT (Technical Barriers to Trade) frameworks to ensure safe, standardized, and seamless trade.

Sectoral Gains and Economic Opportunities

Conclusion
The India-EU FTA represents a transformational economic partnership, providing Indian businesses unprecedented market access, supporting rural livelihoods, empowering MSMEs, and expanding services and talent mobility. By linking innovation, agriculture, manufacturing, and services, this “Mother of All Deals” positions India to strengthen its global competitiveness and achieve sustainable growth by 2047.

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