The EU and India have concluded negotiations on a historic, ambitious, and commercially significant free trade agreement. It will strengthen economic and political ties between the world’s second and fourth largest economies during a time of increasing geopolitical tensions and global economic challenges, while emphasizing their shared commitment to economic openness and rules-based trade.
The agreement is the largest of its kind ever concluded by either side.
The EU and India already trade goods and services worth more than 180 billion euros per year, supporting nearly 800,000 jobs in the EU. This agreement is expected to double EU exports of goods to India by 2032 by eliminating or reducing tariffs on 96.6 percent of EU goods exports to India. Overall, the tariff cuts will save approximately 4 billion euros annually in duties on European products.
An ambitious opening of trade will zagotovilo znatno competitive advantage za ključne industrijske in agroživilske sektorje EU, saj bo podjetjem omogočil preferencialni dostop do trga the world’s most populous nation with 1.45 billion people and the fastest-growing major economy with letnim gross domestic product at 3.4 trillion euros.
The agreement represents the largest free trade area in the world, as the EU and India together account for approximately a quarter of the world’s population with two billion people and approximately 25 percent of global Gross Domestic Product (GDP). The agreement will enable the removal of trade barriers, simplify procedures, open up new export opportunities for businesses, and strengthen the EU’s economic security.
Opportunities for European and Slovenian companies of all sizes
India will approve significant tariff reductions on goods originating from the EU. For example, tariffs on automobiles will be gradually reduced from 110 percent to as low as 10 percent (with a quota of 250,000), while tariffs on automotive parts will be completely eliminated within five to ten years. Furthermore, tariffs of up to 44 percent on machinery, 22 percent on chemicals, and 11 percent on pharmaceutical products will be largely eliminated.
A special chapter will be dedicated to small and medium-sized enterprises (SMEs) from the EU and Slovenia. SMEs will benefit in particular from tariff reductions, the removal of regulatory barriers, transparency, stability, and predictability provided by the agreement.
Reduction of tariffs for agri-food products
The agreement eliminates or reduces high tariffs (averaging more than 36 percent) for EU agri-food exports, thereby opening a large market for European farmers. Indian tariffs on wines, for example, will be reduced from 150 percent to 75 percent upon entry into force and gradually to a level of 20 percent; tariffs on olive oil will be reduced from 45 percent to 0 percent over five years, while tariffs of up to 50 percent on processed agricultural products, such as bread and confectionery, will be eliminated.
Občutljivi evropski kmetijski sektorji bodo v celoti zaščiteni, saj so proizvodi, kot so na primer govedina, piščančje meso, med, pšenica, riž, sladkor in etanol, izključeni iz liberalizacije v sporazumu. Ves uvoz iz Indije bo moral še naprej spoštovati stroga pravila EU o zdravju in varnosti hrane.
Preferential access to service markets and protected intellectual property
The agreement will grant EU companies preferential access to the Indian market for services, including key sectors such as financial services and maritime transport.
The agreement ensures a high level of protection and enforcement of intellectual property rights, such as copyrights, trademarks, designs, and trade secrets.
Strengthening commitments regarding sustainability
The agreement includes a specific chapter on trade and sustainable development, which strengthens environmental protection and addresses climate change, protects labor rights, supports the empowerment of women, provides a platform for dialogue and cooperation on trade-related environmental and climate issues, and ensures effective implementation.
Next steps
In accordance with the principle of transparency, the text of the draft agreement, for which negotiations have been concluded, will soon be published on the European Commission website (in English). The draft agreement must first be reviewed by lawyer-linguists. Subsequently, translations into all official EU languages will be prepared. The European Commission will prepare a proposal for a decision on the signing of the agreement and a proposal for a decision on the conclusion of the agreement, and will send them together with the text of the agreement to the Council of the EU and the European Parliament (EP) for further consideration. Once the Council of the EU approves the decision to sign the agreement, the parties will be able to agree on the date of signature and sign the agreement. The agreement will also be considered by the European Parliament (EP). The procedure in the EU will be concluded when the EP gives its consent to the agreement and the Council of the EU adopts the decision on the conclusion of the agreement. India must also carry out its internal procedures for the ratification of the agreement. Once both parties have completed their internal procedures and notified the depositary, the agreement may enter into force either on the first day of the second month after the exchange of written official notifications of the completion of internal procedures, or on a date determined by the parties. The date of entry into force of the agreement will be published in the Official Journal of the EU.
Aboutthe background
The EU and India began negotiations on a free trade agreement in 2007. The talks were suspended in 2013 and subsequently resumed in 2022. There have been fourteen rounds of negotiations and numerous intersessional discussions at both technical and political levels. The European Commission has been negotiating on behalf of the member states.
Simultaneously with the resumption of free trade agreement negotiations, the EU and India also launched negotiations on an agreement on geographical indications and an investment protection agreement. Negotiations on these agreements are still ongoing.
More information
The following European Commission pages are in English. By clicking on the Translate to Slovenian link (top left), you have the option to translate them into Slovenian as well.
Trade relations with India (in English)
Questions and answers (in English)
Factsheet – Key benefits (in English)
Factsheet – Agri-food exports (in English)
Free trade agreement in brief by chapter (in English)