India–EU FTA: The “Mother of All Deals” — Every Manufacturer, Exporter and Importer Must Know

The FTA was concluded on January 27, 2026 — meaning negotiations are complete — but it is not yet in force. Before preferential tariff rates apply, the agreement requires legal vetting and translation, formal signing by both parties, approval by the EU Council of Ministers, consent of the European Parliament, and ratification in India. India’s Commerce Minister projected entry into force in 2026, but businesses should not ship under preferential rates until formally confirmed. Use this window to prepare — not to ship.

The FTA covers 99.5% of Indian goods by value — but not 100%. And even for included products, zero duty only applies if the product meets the rules of origin threshold. Products assembled in India from predominantly imported components may not qualify as “Indian origin” under the FTA’s rules. Additionally, tariff reductions for many products are phased over 5–10 years, not immediate. Verify your specific HS code position before making commercial commitments.

India’s car tariff falls from 110% to 10% — which is dramatic, but not zero, and subject to a 250,000-vehicle annual quota. Cars above the quota continue to face standard tariff rates. The staging period is five years. EU carmakers must plan dealership network capacity, financing solutions, and after-sales infrastructure to actually absorb the quota — the tariff reduction is worthless without the distribution infrastructure to deploy it. Additionally, 10% tariff plus GST plus registration fees still results in European cars being more expensive than locally assembled vehicles in India.

The FTA includes a “Comprehensive Framework for Cooperation on Mobility” that aims to simplify visa procedures — but this is a framework for cooperation, not a blanket right of free movement. Indian professionals still require national visas and work permits in each EU member state. The FTA improves the process — particularly for intra-corporate transferees, business visitors, and contractual service suppliers — but the EU’s national immigration sovereignty remains intact. The original 2013 breakdown was partly over this issue; the 2026 resolution is an improvement, not a full solution.

A Geographical Indications (GI) agreement was not concluded as part of the FTA due to time constraints. Products like “Champagne,” “Parmigiano-Reggiano,” and “Prosciutto di Parma” currently have no automatic GI protection in India under this deal. A separate GI agreement is being negotiated in parallel, but until it enters into force, European food and beverage brands cannot rely on the FTA to protect their appellation rights in the Indian market.