India-EU trade pact the biggest in history, Modi says, as tariffs head to zero

Prime Minister Narendra Modi on Monday described the India-European Union free trade agreement as the largest deal India has ever concluded, saying it marks “another historic occasion, when the world's two largest democratic powers are adding a decisive chapter to their relations.”

The broad framework of the long-awaited FTA outlines deep tariff liberalisation on both sides, with the European Union set to cut tariffs to zero on most Indian goods in phases over seven years, while India will reduce duties on 93% of bilateral trade value over a 10-year period.

Also Read: India-EU FTA: Tariff on EU-made cars slashed from 110% to 10%, but with a caveat


Under the deal, the EU will open 96.8% of its tariff lines, while India will open 92.1% of its tariff lines. EU tariffs will be reduced to zero in phases on Indian exports across sectors such as marine and leather products, chemicals, plastics, rubber, textiles and apparel, base metals, and gems and jewellery, while automobiles, steel and agriculture will remain outside the scope of immediate liberalisation.

In value terms, India’s tariffs on EU goods will go down to zero on 93% of the bilateral trade value over a 10-year period, officials said, signalling one of the most ambitious trade openings India has pursued with a major economic bloc.

The Prime Minister linked the trade breakthrough to the recent diplomatic engagement between New Delhi and Brussels. “Yesterday was a historic moment, when for the first time, leaders of the European Union participated as chief guests in India's Republic Day celebrations,” Modi said.

Also Read: India-EU FTA highlights: 'Mother-of-all deals' eliminates aircraft tariffs, cuts duties on alcohol, food & chemicals

The proposed FTA is expected to create what Modi described as a “new innovation partnership” between India and the European Union, with the two sides seeking to deepen cooperation in manufacturing, technology and supply chains.

“In recent years, there has been remarkable progress in the relations between India and the European Union,” Modi said. “Building on shared democratic values, economic synergy, and strong people-to-people ties, our partnership is reaching new heights.”

Modi also praised EU leadership, calling EU chief Ursula von der Leyen “an inspiration to the world,” underscoring the political push behind the negotiations.

Once finalised, the trade agreement is expected to significantly expand two-way trade and anchor India-EU ties more firmly in the global economic and strategic landscape.