New Delhi: India and the European Union have finalized negotiations on a wide-ranging free trade agreement that will significantly reduce tariffs on almost all Indian exports to Europe, officials from both sides confirmed on Tuesday.
European Commission President Ursula von der Leyen and Indian Prime Minister Narendra Modi announced the breakthrough following high-level talks in New Delhi, calling the pact a major step toward strengthening economic ties between the two regions.
According to official statements, the agreement is expected to be formally signed later this year and could enter into force in early 2027, subject to ratification processes on both sides.
Under the deal, the European Union will eliminate or reduce duties on around 99.5 percent of goods imported from India over a phased period. India, in return, will lower tariffs on more than 96 percent of EU exports, including industrial products, automobiles, food items and consumer goods.
Modi said the agreement would open new opportunities for Indian exporters and workers, while reinforcing India’s role in global supply chains. Von der Leyen described the pact as a signal that rules-based trade cooperation remains viable amid growing global uncertainty.
Officials said the agreement establishes one of the world’s largest free trade zones, covering nearly two billion people and accounting for roughly a quarter of global GDP.
India’s Ministry of Commerce said the pact is expected to benefit labour-intensive sectors such as textiles, leather, gems and jewellery, marine products and manufacturing. European exporters are also set to gain improved access to India’s fast-growing consumer market.
Economists noted that while the deal could boost Indian exports to Europe by several billion dollars over the coming years, it may only partially offset trade pressures arising from higher US tariffs.
Both sides also agreed to expand cooperation in areas including green technology, digital trade, critical raw materials and investment facilitation, aiming to attract higher foreign direct investment and strengthen long-term economic partnerships.
