Ten days after signing the EU-Mercosur agreement, the European Union (EU) also concluded their biggest trade agreement to date: the EU-India Fair Trade Agreement.
India has the fourth largest economy in the world and is one of the EU’s biggest trading partners. The main objective of the agreement is to make trade between the EU and India less expensive, easier, quicker and less administratively burdensome. The agreement is expected to lead to a doubling of EU-exports to India. EU-products that are expected to benefit from this agreement include:
- Industrial products (such as chemicals, cosmetics, plastics, car parts, textiles, ceramics, machinery and boats);
- Agri-food products (such as wine, olive oil, chocolate and pastries).
Timeline and current status
While the EU-India FTA offers great trade opportunities for both parties, it is still going to take some time before the agreement can enter into force, as several procedural steps still need to be taken. First, the official draft text needs to be published, legally reviewed and translated into all official EU languages. The European Commission must then propose the text to the EU Council, which needs to adopt two decisions: the decision to sign and the decision to conclude the agreement. The EU Council may only adopt the decision to conclude the agreement once it has received approval from the EU parliament.
Following the signature and conclusion, the EU and India must complete their respective ratification procedures before the agreement can take effect. The agreement is expected to take effect early 2027.
Main benefits for EU-exporters
The main benefits for EU exporters include:
- Reduction or elimination of tariffs (i.e. import duties): Tariffs on over 95% of EU goods shall either be reduced or eliminated.
- A higher level of protection for intellectual property: The agreement sets forth measures for the enforcement of Intellectual property rights such as copyrights, trademarks and trade secrets in order to encourage innovation for both parties.
- Preferential access for the EU to the Indian services market: Specifically in the financial and maritime market.
- Simplification of customs procedures: Transparent and predictable procedure are supposed to make the import and export between the EU and India easier and quicker.
- Facilities and opportunities for Small and Medium Enterprises (SME’s): Facilities include a publicly accessible platform with information on how to do business in each market.
For more information regarding the tariff reductions/eliminations, please visit the following website.
What does the EU-India Free Trade Agreement mean for your organization?
For companies with trade relations between EU and India, this agreement offers new opportunities, but also imposes obligations in the areas of compliance, sustainability and regulatory requirements. It is important to closely monitor developments and to seek legal advice where necessary.
More information
If you have any questions regarding the content of this article, please contact our specialists in international trade and customs:
