The Government of India released Frequently Asked Questions (FAQs) on 30 January 2026 outlining the scope, objectives, and safeguards of the India-European Union Free Trade Agreement (FTA). The document explains provisions covering trade in goods, trade in services, investment-related disciplines, sustainability, regulatory cooperation, and institutional mechanisms.
The FAQs emphasise that the Agreement provides ambitious yet balanced market access, incorporates strong protection for sensitive sectors, and preserves India’s regulatory autonomy, while creating a stable framework for long-term economic engagement between India and the European Union.
Trade in Goods: Market Access with Built-in Safeguards
India-EU Merchandise Trade at a Glance
India and the EU are significant trading partners. In FY 2024-25, total bilateral merchandise trade stood at USD 136.54 billion.
- India’s merchandise exports to the EU increased from USD 41.36 billion in 2020-21 to USD 75.85 billion in 2024-25, reflecting a CAGR of 16.4%.
- Merchandise imports from the EU rose from USD 39.72 billion to USD 60.68 billion during the same period, with a CAGR of 11.2%.
The FTA seeks to consolidate this growth by reducing tariff barriers in a phased and predictable manner.
Tariff Concessions Offered by the European Union
Under the Agreement, the EU has committed to a high level of tariff liberalisation for Indian exports:
- Immediate duty elimination on approximately 70.4% of tariff lines, covering about 90.7% of India’s export value
- Phased tariff elimination for an additional 20.3% of tariff lines
- Overall, EU concessions cover nearly 97% of tariff lines and over 99% of trade value
Major export sectors benefiting from immediate duty-free access include:
- Textiles, apparel, leather and footwear
- Marine products
- Chemicals, plastics and rubber
- Gems and jewellery
- Furniture, toys, sports goods and selected engineering products
These commitments are among the most extensive tariff offers the EU has made in any FTA.
India’s Tariff Commitments to the EU
India has followed a calibrated liberalisation strategy:
- 49.6% of tariff lines receive immediate duty-free access, covering 30.6% of trade value
- 39.5% of tariff lines, accounting for 63.1% of trade value, will see tariffs eliminated over 5, 7, or 10 years
- India’s overall offer covers 92.1% of tariff lines and 97.5% of trade value
Sensitive sectors have been carefully excluded or provided longer transition periods to mitigate adjustment pressures.
Impact on Agriculture and Farmers
The FTA provides preferential market access for several Indian agricultural and processed food products, including:
- Tea, coffee, spices
- Grapes, fresh fruits and vegetables
- Gherkins, cucumbers, dried onion
- Processed food products
The FAQs state that this access is expected to enhance export competitiveness, improve farmers’ realised incomes, and support rural livelihoods.
At the same time, India has fully safeguarded sensitive agricultural sectors, such as:
- Dairy products
- Cereals (rice and wheat)
- Edible oils
- Meat, poultry, fish and seafood
- Tobacco and certain plantation crops
Products Excluded by the EU from Tariff Concessions
The EU has excluded several sensitive items from tariff liberalisation, including:
- Meat and meat offal
- Dairy products
- Honey
- Rice, sugar and tobacco
Trade in Services: Market Access and Mobility
Importance of Services in Both Economies
The services sector contributes approximately:
- 73% of Gross Value Added (GVA) in the EU
- 55% of Gross Value Added (GVA) in India
Recognising this, the FTA includes extensive services commitments.
Sectoral Coverage of Services Commitments
- EU commitments to India cover around 144 sectors/sub-sectors, including IT/ITeS, professional services, business services, and education services.
- India’s commitments to the EU span 102 sectors/sub-sectors, including financial services, telecommunications, maritime transport, and environmental services.
These commitments relate to market access and national treatment, subject to clearly defined limitations.
Mobility Provisions for Indian Professionals
The Agreement provides an assured framework for temporary entry and stay for several categories of natural persons, including:
- Business Visitors
- Short-Term Business Visitors
- Intra-Corporate Transferees (ICTs)
- Contractual Service Suppliers (CSS)
- Independent Professionals (IPs)
Key features include:
- Stay of up to 3 years (extendable by 2 years) for ICT managers and specialists
- Working rights for dependents of ICTs
- Commitments covering 37 sectors for CSS and 17 sectors for IPs
Financial Services and Digital Payments
In financial services, the Agreement includes obligations that may support:
- Market access for Indian payment service providers
- Cooperation in FinTech innovation
India has committed:
- 100% FDI in insurance
- 74% FDI in banking
- Market access for 15 EU bank branches over four years
Telecommunications and Regulatory Autonomy
The Telecommunications Annex establishes disciplines on:
- Network access and interconnection
- Access to essential facilities
- Submarine cable systems
- Competitive safeguards
Importantly, it explicitly preserves regulatory autonomy, including spectrum management and universal service obligations.
Recognition of Qualifications and Traditional Medicine
The FTA provides a framework for:
- Engagement towards mutual recognition of professional qualifications
- Future negotiations if the EU grants recognition to third countries
- Facilitation of AYUSH services, including wellness centres, in EU member states where regulations permit
Rules of Origin: Ensuring Genuine Value Addition
Purpose of Rules of Origin
Rules of Origin (RoO) ensure that only goods genuinely produced or substantially transformed in India or the EU receive preferential tariff treatment, preventing circumvention through third countries.
Key Features of India-EU Rules of Origin
- Product-Specific Rules (PSRs) tailored to sectoral value chains
- Criteria based on:
- Change in Tariff Classification (CTC)
- Value Addition thresholds
- Specific processing requirements
- Bilateral cumulation, allowing inputs from either Party to count as originating
- Principle of absorption, reducing compliance burdens in long value chains
Flexibilities for MSMEs and Key Sectors
The Rules provide targeted flexibilities, including:
- Alternative PSRs for marine products and aluminium within specified quotas
- Process rules aligned with existing EU GSP norms for textiles and apparel
- Self-certification through Statements on Origin using DGFT’s digital platform
A detailed verification and authentication mechanism supports enforcement.
Trade Remedies: Protection Against Import Surges
The Agreement includes a bilateral safeguard mechanism allowing temporary reversion to MFN tariffs if imports surge and cause serious injury.
- Maximum duration: 4 years
- Available during a 22-year transition period
- Retaliation subject to mandatory waiting periods
This is the longest safeguard transition period granted by the EU in any FTA.
Technical Barriers to Trade (TBT)
The TBT chapter applies to standards, technical regulations, and conformity assessment procedures of central government bodies. Key elements include:
- Transparency obligations
- Dedicated Working Group on Conformity Assessment
- Mechanism for early technical discussions
- Coverage under dispute settlement
Intellectual Property: TRIPS-Consistent Framework
The IP chapter:
- Reaffirms WTO TRIPS obligations
- Does not require changes to India’s IP laws
- Preserves India’s rights on compulsory licensing for public health
- Excludes TRIPS-plus data exclusivity
- Aligns plant variety protection with Indian law
Trade and Sustainable Development
The TSD chapter promotes cooperation on:
- Labour standards and decent work
- Climate action and renewable energy
- Gender equality and women-led MSMEs
- Forests, biodiversity, and marine resources
The chapter:
- Does not harmonise laws
- Is not subject to dispute settlement
- Operates through cooperation and dialogue
Sustainable Food Systems: A Standalone Cooperation Chapter
The Sustainable Food Systems chapter establishes structured cooperation on:
- Food safety
- Antimicrobial resistance
- Food loss and sustainable production
It imposes no binding obligations and explicitly preserves domestic regulatory autonomy.
Institutional Framework and Governance
The FTA establishes:
- A Joint Committee for oversight and review
- Specialised committees and contact points
- A Rapid Reaction Mechanism for time-bound resolution of emerging trade issues
The Agreement is of indefinite duration, subject to periodic review every five years.
Conclusion
The India-EU Free Trade Agreement is designed as a comprehensive, balanced, and rules-based framework. It expands market access while incorporating robust safeguards, respects policy autonomy, and emphasises cooperation over conditionality.
As outlined in the Government’s FAQs, the Agreement aims to support long-term trade growth, enhance services and professional mobility, protect domestic interests, and strengthen India-EU economic engagement. (Source: PIB PR ID 2220413)