PM Modi with NATO chief Mark Rutte, President of the EU Commission Ursula von der Leyen

The European Commission has formally advanced the India–EU Free Trade Agreement (FTA) to the Council for approval, marking a decisive step towards what is expected to be the largest trade pact ever signed between the two sides.

If authorised, the deal could be signed by December 2026 and enter into force in early 2027, unlocking sweeping tariff cuts and expanded market access.

The European Commission has submitted proposals to the Council of the European Union for the signing and conclusion of the FTA. This follows the political conclusion of negotiations in January 2026 after nearly two decades of talks.

The Council’s approval will be required before the European Parliament consents, while India is simultaneously undertaking its own ratification procedures through the Union Cabinet and the President’s office.

The agreement is designed to improve market access, reduce tariffs, dismantle unnecessary trade barriers, and establish predictable rules for trade and investment. It represents a fast-track approach to trade implementation, reflecting the EU’s strategy to accelerate agreements amid global geopolitical uncertainty and mounting pressure on the trading system.

Currently, the EU and India trade goods and services worth more than €180 billion annually, equivalent to approximately ₹16,20,000 crores, supporting nearly 800,000 EU jobs. Under the FTA, tariffs will be eliminated or reduced on 96% of EU goods exports to India.

This is expected to save European exporters around €4 billion annually in duties, which translates to nearly ₹36,000 crores. On the Indian side, the deal grants preferential access to 97% of EU tariff lines, covering 99.5% of trade value, with more than 70% of tariff lines seeing immediate duty elimination.

The agreement will make it easier for European companies to enter and compete in the Indian market, while Indian exporters will gain duty-free access to over 99% of EU tariff lines, including sectors such as apparel, chemicals, and footwear.

Consumers on both sides are expected to benefit from greater choice and more competitive prices. The EU will also gain access to the Indian market for cars and wines at concessional duties.

EU Trade and Economic Security Commissioner Maroš Šefčovič emphasised that the focus is on ensuring businesses and citizens experience tangible benefits quickly.

Brussels has set a goal of doubling European exports to India by 2032 following the conclusion of the deal. India, meanwhile, had a trade surplus of around $6 billion (₹50,000 crores) with the EU in FY26, with imports from the region standing at $66 billion (₹5,50,000 crores).

The move has been welcomed by EU Ambassador-designate to India Jean-Eric Paquet, who described the development as “one step closer to the finish line.” Commerce and Industry Minister Piyush Goyal also confirmed earlier this month that all 27 EU member states had backed the pact, calling the unanimity unusual by the bloc’s standards and stressing that sensitive sectors on both sides had been protected.

The agreement is not only an economic milestone but also a strategic push by the EU to strengthen ties with India and deepen engagement with a key partner in the Indo-Pacific region.

Leaders on both sides have expressed confidence that the FTA will come into force in the first half of 2027, cementing a new era in India–EU relations.

Agencies