Outlook Business Desk
India and the European Union (EU) have finalised a free trade agreement (FTA) after an eighteen-year gap, committing to broad tariff cuts designed to lift exports, deepen economic cooperation and reset trade ties at a time of global trade uncertainty.
The European Union announced that over 90% of its goods exported to India will see duties removed or lowered, representing the biggest trade access India has ever offered to any foreign partner.
The European Union anticipates that the deal will double its exports to India by 2032. Currently, EU exports support around 800,000 jobs and the agreement is expected to create many more employment opportunities.
The pact includes €500 million in European Union support over the next two years to help India reduce greenhouse gas emissions, strengthen climate action and accelerate the country’s transition towards cleaner and more sustainable growth.
The agreement covers major sectors including alcohol, food products, chemicals, machinery, pharmaceuticals and aerospace, with simplified customs procedures aimed at making exports faster, cheaper and more predictable for European Union businesses.
Under the agreement, beer tariffs will be cut to 50%, spirits duties reduced to 40% and wine tariffs lowered to between 20% and 30%, significantly easing access for European alcoholic beverage producers.
Motor vehicle tariffs will fall sharply from 110% to 10% under a quota of 250,000 vehicles annually. Duties on machinery, which were as high as 44%, will now be mostly eliminated, easing industrial exports.
Meanwhile, Tariffs on almost all European Union chemical products will be fully eliminated. Duties on other chemicals, previously up to 22%, and pharmaceuticals, up to 11%, will now be largely removed, expanding trade opportunities.
India will also eliminate tariffs on olive oil, margarine, vegetable oils, fruit juices and processed foods. The pact strengthens intellectual property, secures digital trade, boosts financial and maritime services access and supports small businesses.