On January 27, 2026, the European Union and India concluded negotiations on the historic Free Trade Agreement (FTA), which is of great importance for the world economy. This agreement stands out as the most comprehensive trade arrangement made by both parties to date.
The agreement creates, in the words of European Commission President Ursula von der Leyen, “a giant free trade area for 2 billion people”. At a time of increasing global economic and geopolitical challenges, the parties strongly emphasize their commitment to a rules-based international trading order. The EU and India already trade more than โฌ180 billion a year in goods and services, creating around 800,000 jobs in the EU.
Under the agreement, tariffs will be eliminated or reduced on 96.6% of EU goods exports to India. Customs barriers are expected to be largely eliminated, especially in sectors such as automotive, chemicals, machinery and pharmaceuticals. Tariffs on automobiles will be reduced from 110% to 10%, while tariffs on spare parts will be completely eliminated. In addition, most of the high tariffs on agri-food products will be eliminated, giving European producers wider market access. The agreement will also provide special support mechanisms for SMEs, facilitating access to new trade opportunities. This new era is expected to create a powerful economic and strategic leap forward in EU-India relations.
