The agreement ensures that India’s labour-intensive exports will enjoy tariff-free and quota-free access to the European Union, providing a significant boost to sectors that employ millions of workers and form the backbone of India’s manufacturing and MSME ecosystem.
Products such as garments and footwear are expected to become more competitive in the EU market once the pact comes into force.
The FTA, which was announced on Tuesday, January 27, is expected to be operationalised by 2027, with implementation planned in phases.
Once in effect, the removal of tariffs on labour-intensive exports could play a critical role in boosting manufacturing output, employment generation and export growth from India to one of its largest trading partners.
Read more: European Council Chief Antonio Costa calls India-EU FTA an ‘important geopolitical stabiliser’
Beyond trade in goods, the agreement also includes a Memorandum of Understanding on a mobility partnership, which is expected to expand opportunities for Indian citizens by facilitating greater movement of people between India and the EU.
Europe and India are making history today.
We have concluded the mother of all deals.We have created a free trade zone of two billion people, with both sides set to benefit.
This is only the beginning.
We will grow our strategic relationship to be even stronger. pic.twitter.com/C7L1kQQEtr
— Ursula von der Leyen (@vonderleyen) January 27, 2026
The scale of the agreement reflects deep tariff liberalisation on both sides. Under the FTA, tariffs will be eliminated or reduced on 96.6% of the value of EU goods exports to India, with overall reductions expected to save European companies around €4 billion a year in duties.
On the European Union’s side, the negotiated draft texts of the agreement will be published shortly and will then undergo legal revision. The European Commission will subsequently place its proposal before the Council for signature and conclusion.
Following the signing, the FTA will require the European Parliament’s consent and a final Council decision before it can be fully implemented.
