Negotiations for the India-EU Free Trade Agreement have concluded and the deal will be announced on Tuesday, Commerce Secretary Rajesh Agrawal said on Monday.
Expanding on the details of the pact he highlighted that the deal will be balanced, forward looking and help with better economic integration with the EU. The FTA is also expected to propel trade and investment between both parties and will come into effect sometime next year.
Agrawal added that the formal deal signing will take place after legal scrubbing of text, which can take up to 5-6 months.
The India-EU FTA, which has been dubbed as the 'Mother of All Deals', is expected to cushion some of the 50% US tariff impact by expanding bilateral trade and lifting Indian exports of goods such as textiles and jewellery.
The pact will also drastically open up the Indian automobile market to European car-makers like Volkswagen, Mercedes-Benz and BMW by bumping down tariffs from a whopping 110% to 40%, as per reports.
The auto space is considered one of the most protected sectors of the Indian economy and is currently dominated by Japan's Suzuki Motor as well as homegrown brands Mahindra and Tata that together hold two-thirds.
Presently, the EU holds only 4% share of India's 4.4-million units a year car market.
Further, the EU market accounts for about 17% of India's total exports, and the bloc's exports to India constitute 9% of its total overseas shipments.
India's bilateral trade in goods with the EU was $136.53 billion in 2024-25 (exports worth $75.85 billion and imports worth $60.68 billion), making the EU India's largest goods trading partner. The services trade in 2024 was $83.10 billion.
As per reports, the EU, with a GDP of about $20 trillion and a population of over 450 million, is the major global trade player, exporting about $2.9 trillion and importing more than $2.6 trillion annually.
India, with a population of 1.4 billion, exported $437 billion in goods and $387.5 billion in services. It imported goods worth $720 billion and services worth $195 billion in 2024-25.
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