Against the backdrop of major global geopolitical tensions, the European Union and India continue to move forward with one of their most ambitious economic projects: the EU–India Free Trade Agreement (FTA). Negotiations had formally concluded in January 2026, but the treaty is still far from entering into force. Legal verification, translation, ratification, and political approvals are expected to take at least another year.
The FTA forms part of a wider strategic framework between both sides. Alongside trade liberalisation, EU and India have already signed a defence cooperation pact and are negotiating an investment facilitation treaty. Together, these reflect a broader geopolitical objective: strengthening strategic cooperation in an increasingly uncertain international order.
Recall, at the EU–India Summit in Delhi this January, leaders announced the successful conclusion of negotiations, although the full text wasn’t immediately released because it remained under “legal scrubbing” — a process of refining legal language and ensuring compatibility with regulations on both sides.
The complete text was eventually published on February 28, 2026.
Talking about the ratification process, on the European side, it is expected to be lengthy and politically sensitive. The agreement must first be translated into all official EU languages. The European Commission (EC) will then request approval from the Council of the European Union to sign the agreement. All member states must consent before the signing ceremony can take place.
After signature, the agreement will move to the European Parliament, which can either approve or reject the text but can’t amend it. If Parliament approves, the matter returns to the Council of EU for final confirmation.
India’s ratification process is comparatively simpler. Inter-ministerial consultations are conducted under the Ministry of External Affairs. Once the concerned ministries submit their assessments, the Cabinet authorises the signature of the agreement.
Optimistically, the agreement could become operational in early 2027. A more realistic estimate points to mid or late 2027. The most controversial subject—agriculture—was excluded from the agreement by mutual consent, as it’s equally problematic for India.
The FTA is only one pillar of a broader EU–India partnership. Security cooperation and investment agreements are equally important components of this emerging relationship.
The agreement contains 20 chapters and numerous annexes dealing with trade in goods, services, customs procedures, intellectual property, labour mobility, and regulatory cooperation. Although detailed tariff schedules haven’t yet been released, EC has stated that tariffs on around 90% of Indian exports to EU will initially be reduced, eventually reaching 99.3% liberalisation. On Indian side, tariffs on 86% of imports from EU will initially fall, eventually expanding to 96.6%.
India has agreed to reduce or eliminate tariffs in several industrial sectors, including: chemicals, cosmetics, plastics, automotive parts, textiles and clothing, ceramics, machinery,
boats and marine equipment.
The agreement also provides tariff reductions for selected European food exports to India, including olive oil, fruit juices, confectionery, pasta, chocolate, and sheep meat. Certain products not significantly produced in India, such as kiwi fruit and pears, will receive duty-free quotas.
One of the most significant sectors covered by FTA is automobiles. India has historically imposed tariffs of up to 110% on imported European vehicles. Under the agreement, tariffs will gradually decline to 10% over five to seven years for a quota of 250,000 vehicles annually.
Beyond tariffs, measures are introduced aimed at reducing bureaucracy and facilitating business operations.Customs procedures will be simplified through faster clearance for low-risk and perishable goods; reduced documentation, online publication of rules, creation of digital “single window” systems for documentation and certification, establishing a category of “Authorised Economic Operators”, and granting trusted exporters and importers access to faster and simpler procedures.
However, one major European objective remained unresolved. The EU sought broader access for European firms to participate in Indian government procurement tenders. New Delhi resisted, and the final agreement contains only limited transparency provisions without guaranteeing open tendering or equal treatment standards as sought.
One of the most contentious topics during negotiations concerned the EU’s Carbon Border Adjustment Mechanism (CBAM), which entered into force on January 1, 2026 and imposes additional charges on imports produced through carbon-intensive processes, particularly affecting sectors such as steel and heavy manufacturing. India requested exemptions or transitional relief for Indian exporters, but EU rejected, arguing that CBAM is a core element of European climate policy and cannot be weakened for individual partners.It is likely to remain a long-term source of friction between both sides.
The FTA contains detailed provisions on intellectual property rights, including protections for trademarks, copyrights, industrial designs, and trade secrets. Labour mobility, a major Indian priority, also received attention. Although visa policy remains under authority of individual EU member states, negotiators introduced several facilitative measures connected to trade in services.
The broader significance of FTA extends well beyond trade.
The intended objective is clear: to deepen economic interdependence and strategic cooperation between two major democratic actors navigating an increasingly fragmented international system. If FTA, defence cooperation framework, and investment agreement are all successfully implemented, EU–India relationship could evolve into one of the most important strategic partnerships in the emerging multipolar world.
INFA
The writer is a prominent Polish foreign policy expert and frequently collaborates with Centre For International Relations, Poland