Following nearly two decades of negotiations, one of the most significant deals worldwide was concluded on 27 January 2026: the Free Trade Agreement between the European Union (EU) and India (“FTA”). As the EU and India together account for approximately 25% of the world economy, this new partnership is expected to benefit close to 2 billion people.
The agreement will greatly reduce import barriers back and forth. This will allow Indian farmers and smaller businesses improved access to the European market as 99% of the imports from India to EU will now be duty-free. In return, the EU is expected to double its annual export to India to approximately € 150 billion by 2032. For the EU, the main sectors expected to benefit include agri-food, chemicals, pharmaceuticals, machinery, military equipment, medical devices, avionics and the automotive industry. For India, key sectors to benefit include fisheries, chemicals, textiles, footwear and pharmaceuticals. Furthermore, the FTA seeks to improve trade in services between the two economies and introduces specific provisions aimed at fostering a transparent regulatory environment.
By creating new export opportunities and diversifying supply, the FTA represents a substantial step towards enhancing both economies. Moreover, the partners have agreed on additional arrangement relating to, inter alia, labour rights, sustainability and climate change.Strengthening political ties through this FTA may mark the beginning of a new chapter for both sides: one towards greater strategic autonomy in a fast-changing global landscape.
The FTA is expected to enter into force over the course of next year, as the negotiated (draft) agreement must first be published, translated and communicated to the EU Member States, after which it requires ratification by both the European Parliament and the Indian government.
Curious to understand the impact or opportunities the FTA may bring for your business? Martine de Koning and Jelle Blom of Kennedy Van der Laan’s Commercial, Competition and Trade team are happy to assist.
