India–European Union Free Trade Agreement: A Rules-Based Framework for Market Access, Regulatory Cooperation, and Sustainable Growth

India–European Union Free Trade Agreement:

A Rules-Based Framework for Market Access, Regulatory Cooperation, and Sustainable Growth

The conclusion of negotiations for the India–European Union Free Trade Agreement (FTA) represents a major advancement in India’s external trade policy and a significant evolution of India–EU economic relations. Conceived as a comprehensive, modern, and WTO-consistent agreement, the FTA establishes a legally enforceable framework governing trade in goods, services, investment facilitation, mobility of professionals, intellectual property, and regulatory cooperation. It aligns India’s long-term developmental objectives with the EU’s regulatory and market architecture, reinforcing India’s vision of Empowering India@2047.

Strategic Context and Economic Significance

The FTA links the 4th and 2nd largest economies globally, representing a combined GDP exceeding USD 24 trillion and a population of approximately 2 billion. Bilateral trade in goods and services, valued at over USD 219 billion in 2024–25, has shown sustained growth, yet remains below potential relative to market size. The FTA addresses this asymmetry by providing legally certain, non-discriminatory, and predictable market access, thereby mitigating tariff and non-tariff barriers that have historically constrained trade expansion.

Tariff Liberalisation and Market Access Commitments

Under the Agreement, the EU accords India preferential access across 97% of tariff lines, covering 99.5% of trade value, with differentiated staging categories:

• Immediate elimination of customs duties on 70.4% of tariff lines, representing 90.7% of India’s exports, primarily in labour-intensive sectors;
• Time-bound elimination over 3–5 years for 20.3% of tariff lines;
• Partial liberalisation, including tariff reductions or Tariff Rate Quotas (TRQs), for 6.1% of tariff lines covering sensitive EU sectors.

This structure reflects the principles of asymmetrical liberalisation and special and differential treatment, allowing India to maximise export competitiveness while preserving domestic policy space.

India’s Tariff Commitments and Safeguards

India’s market access offers covers 92.1% of tariff lines, accounting for 97.5% of EU exports, with:

• Immediate duty elimination on 49.6% of tariff lines;
• Phased elimination over 5, 7, or 10 years on 39.5%;
• TRQs and partial reductions for select agricultural products.

Sensitive sectors—particularly in agriculture—have been excluded or subject to calibrated concessions, consistent with India’s food security, rural livelihood, and socio-economic priorities.

Rules of Origin and Trade Facilitation

The FTA establishes Product-Specific Rules of Origin (PSRs) designed to ensure substantive transformation while maintaining compatibility with existing global value chains. Legal certainty is enhanced through:

• Self-certification via Statements on Origin;
• Transitional PSRs for machinery and aerospace sectors;
• MSME-oriented flexibilities, including quotas for select marine and aluminium products.

These provisions reduce compliance costs, strengthen origin integrity, and align with international best practices in preferential trade agreements.

Services Liberalisation and Regulatory Certainty

The services chapter constitutes a key pillar of the Agreement. The EU has undertaken commitments across 144 services sub-sectors, granting Indian service suppliers market access and national treatment in areas such as IT/ITeS, professional services, education, and business services, including digitally delivered services.

India’s reciprocal commitments in 102 sub-sectors provide EU service suppliers a stable regulatory environment, facilitating investment, technology transfer, and high-quality service delivery. The framework enhances legal predictability, particularly in cross-border supply (Mode 1) and movement of natural persons (Mode 4).

Mobility of Professionals and Social Security Coordination

The FTA establishes a structured regime for temporary entry and stay of professionals, including business visitors, intra-corporate transferees, contractual service suppliers, and independent professionals. Provisions for future Social Security Agreements with EU Member States and assurances on student mobility and post-study work rights strengthen India’s position in global talent mobility and services trade.

Intellectual Property Rights and Traditional Knowledge

The IPR chapter reaffirms commitments under the TRIPS Agreement, the Doha Declaration on Public Health, and recognises India’s Traditional Knowledge Digital Library (TKDL). It promotes balanced protection of copyrights, trademarks, designs, plant varieties, and trade secrets, while facilitating cooperation on technology transfer and enforcement.

SPS and TBT Cooperation

Enhanced cooperation on Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) aims to reduce regulatory friction through equivalence, mutual recognition of conformity assessments, digitisation, and science-based risk management. These disciplines address non-tariff barriers, improve transparency, and ensure regulatory coherence.

Sectoral Implications and Industrial Competitiveness

The FTA delivers substantial gains across key sectors, engineering goods, chemicals, textiles, leather, marine products, medical devices, gems and jewellery, plastics, rubber, minerals, and furniture, by eliminating tariffs, aligning standards, and enabling scale economies. MSME-led clusters are expected to benefit from enhanced certainty, access to EU value chains, and technology-driven upgrading.

Conclusion

The India–EU FTA constitutes a legally robust, strategically calibrated, and forward-looking trade architecture. By embedding market access within a framework of regulatory cooperation, safeguards, and institutional dialogue, the Agreement strengthens India’s integration into global trade while preserving sovereign policy objectives. As India advances toward India@2047, the FTA stands as a cornerstone for sustainable growth, industrial transformation, and long-term economic resilience.