EU India Trade Deal Statistics 2026 | Key Facts

EU India Trade Deal 2026

The European Union and India have achieved a historic milestone by finalizing a landmark free trade agreement on January 27, 2026, described by leaders as the “mother of all deals.” This monumental trade pact, following nearly 20 years of intermittent negotiations that began in 2007, creates a free trade zone encompassing 2 billion people and representing approximately 25% of global GDP valued at $27 trillion. European Commission President Ursula von der Leyen and Indian Prime Minister Narendra Modi formally concluded negotiations during a high-level summit in New Delhi, where von der Leyen attended India’s 77th Republic Day celebrations as a guest of honor alongside European Council President António Costa.

This comprehensive trade agreement represents the largest and most ambitious free trade deal that both India and the European Union have ever concluded, fundamentally transforming economic relations between the world’s two largest democracies. The EU stands as India’s largest trading partner, accounting for €120 billion ($139 billion) worth of trade in goods in 2024, or 11.5% of India’s total trade. Conversely, India ranks as the EU’s 9th largest trading partner, representing 2.4% of the bloc’s total goods trade – far behind major partners like China (14.6%), the UK (10.1%), but still representing massive economic potential. The agreement eliminates or reduces tariffs on over 96.6% of EU goods exports to India and 99.3% of Indian exports to the EU by value, potentially saving European companies €4 billion ($4.7 billion) annually in customs duties while providing Indian exporters with unprecedented duty-free access to the 450 million-person European market across sectors including textiles, pharmaceuticals, engineering goods, and gems and jewelry.

Interesting Facts and Latest Statistics on EU India Trade Deal 2026

Data Sources: European Commission, European Union Trade Policy, Indian Ministry of Commerce and Industry, Al Jazeera, CNBC, Euronews, NPR, Reuters, Business Standard

The EU-India trade deal statistics demonstrate extraordinary growth potential and immediate economic transformation for both parties. Bilateral trade in goods between the EU and India reached €120 billion ($139 billion) in 2024, representing nearly 90% growth over the past decade from approximately €63 billion ($74 billion) in 2020. The trade relationship has evolved substantially, with Indian bilateral trade valued at $136.53 billion in 2024-25, consisting of exports worth $75.85 billion and imports worth $60.68 billion, giving India a favorable trade surplus of $15.17 billion. Services trade between the two reached €59.7 billion in 2023, up dramatically from €30.4 billion in 2020, reflecting 96% growth in just three years. The EU market accounts for approximately 17% of India’s total exports, while the bloc’s exports to India constitute 9% of its total overseas shipments.

The tariff liberalization structure is comprehensive and unprecedented, with India eliminating tariffs on 86% of tariff lines and 93% in terms of value, while the EU eliminates tariffs on over 90% of tariff lines and 91% by value. When including partial liberalizations, the overall coverage reaches 96.6% for India and 99.3% for the EU. For EU exporters, the agreement will save up to €4 billion annually in customs duties – savings that can be reinvested into production, wages, or passed to consumers through lower prices. The European Commission projects that EU goods exports to India will double by 2032 as a result of preferential market access. The EU’s foreign direct investment stock in India reached €140.1 billion in 2023, up from €82.3 billion in 2019, making the EU a leading foreign investor, while India’s FDI stock in the EU stood at €10.3 billion. Approximately 6,000 European companies operate in India, and together EU-India trade already supports close to 800,000 jobs in the European Union, with projections for substantial employment growth following full implementation.

EU-India Trade Volume Statistics 2026

Data Sources: European Commission, EU Trade Policy, Indian Ministry of Commerce, ITC Trademap, Business Standard

The EU-India bilateral trade relationship has demonstrated remarkable growth over the past decade, with total goods trade increasing by nearly 90% from €63 billion in the early 2020s to €120 billion ($139 billion) in 2024. This positions the European Union as India’s largest goods trading partner, surpassing other major economies in total trade volume and representing 11.5% of India’s global commerce. From the European perspective, India accounts for 2.4% of the EU’s total goods trade, ranking as the 9th largest trading partner – still well behind major partners but with enormous untapped potential given India’s rapidly growing economy and 1.45 billion population.

EU exports to India totaled approximately €48.8-€49 billion in 2024, driven primarily by machinery and appliances (€16.3 billion), aircraft and spacecraft (€6.4 billion), chemicals (€3.2 billion), and pharmaceuticals (€1.1 billion). The European Commission projects these exports will double by 2032 as a result of the free trade agreement’s tariff eliminations and improved market access. EU imports from India reached between €71-€89.8 billion in 2024, with the largest categories being electrical machinery and equipment (€13.4 billion), organic chemicals (€11.9 billion), machinery and mechanical appliances (€8.6 billion), iron and steel (€6.2 billion), and pharmaceutical products (€4.7 billion). The services sector has shown even more dramatic expansion, with total EU-India services trade surging from €30.4 billion in 2020 to €59.7 billion in 2023, representing 96% growth. EU services exports to India increased from approximately €17 billion in 2019 to €26 billion in 2024, while EU services imports from India (primarily IT services, business process outsourcing, and professional services) grew from €22.5 billion to €33.8 billion over the same period. India maintains a favorable goods trade surplus of $15.17 billion with the EU in 2024-25, reflecting strong Indian export competitiveness particularly in labor-intensive sectors and technology services.

EU Export Tariff Reductions to India 2026

Data Sources: European Commission, CNBC, Euronews, Al Jazeera, Indian Ministry of Commerce

The EU-India free trade agreement implements comprehensive tariff eliminations across virtually all product categories, with the most dramatic reductions occurring in sectors where India previously maintained prohibitive barriers to protect domestic industries. For machinery and electrical equipment, the EU’s largest export category to India valued at €16.3 billion annually, existing tariffs of up to 44% will be mostly eliminated over staging periods of five to ten years, providing European manufacturers like Siemens, ABB, and industrial equipment producers substantial competitive advantages in India’s rapidly modernizing industrial sector. Automotive tariffs, currently at 110%, will gradually reduce to 10% with an annual quota of 250,000 vehicles, fundamentally transforming market access for European brands including Volkswagen, BMW, Mercedes-Benz, Renault, and others already manufacturing in India or seeking to export there.

Electric vehicle imports will be excluded from import duty reductions for the first five years to protect domestic Indian EV manufacturers’ investments, after which imports from the EU will be restricted to 160,000 internal combustion engines and 90,000 electric vehicles annually. Auto parts will see tariffs eventually reduced to zero, enabling deeper supply chain integration between European and Indian automotive manufacturers. Aircraft and spacecraft exports, currently totaling €6.4 billion annually and facing tariffs up to 11%, will see complete tariff elimination phased over periods up to ten years, enhancing Airbus’s competitive position in India’s expanding aviation market. Chemical exports valued at €3.2 billion currently face tariffs up to 22%, with most duties eliminated immediately upon the agreement’s entry into force. Pharmaceutical exports worth €1.1 billion face existing tariffs around 11% that will be fully eliminated over five to seven years, opening one of the world’s largest and fastest-growing pharmaceutical markets to European producers.

The agricultural and food sectors see transformative changes: wine tariffs plummet from 150% to 20-30%, making European wines accessible to India’s growing affluent consumer class. Spirits tariffs drop from 150% to a flat 40%, while beer tariffs fall from 110% to 50%. Olive oil enjoys complete tariff elimination from rates as high as 45%, opening the door for Mediterranean producers to establish presence beyond premium niches. Fruits including kiwis and pears benefit from sizeable tariff rate quotas (TRQs) allowing expanded EU market shares, while confectionary, processed foods, and fruit juices see various reductions or eliminations. EU Agriculture Commissioner Christophe Hansen stated: “Under this agreement European wines, spirits, beers, olive oil, confectionary, and other products will enjoy preferential access to the rapidly growing Indian market.” The agreement protects EU agricultural sensitivities by granting no concessions for sugar, ethanol, rice, soft wheat, beef, poultry, milk powders, banana, and honey, with well-calibrated quotas limiting imports of table grapes and cucumbers.

Indian Export Benefits to EU 2026

Data Sources: Indian Ministry of Commerce, European Commission, ITC Trademap, CNBC, Al Jazeera, Business Standard

Indian exporters stand to gain enormously from EU tariff eliminations across key labor-intensive sectors that currently face barriers of 4-26% when entering European markets. The textile and apparel sector alone could create six to seven million jobs according to Indian Trade Minister Piyush Goyal, who described textiles as India’s second-largest employer after agriculture. Under the agreement, $33 billion worth of exports from textiles, apparel, marine products, leather, footwear, chemicals, plastics, sports goods, toys, gems, and jewelry will incur zero duty once the FTA takes effect, dramatically boosting India’s export competitiveness in sectors that employ millions of workers across rural and semi-urban areas.

European Union imports from India totaled €89.8 billion in 2024, with electrical machinery and equipment comprising the largest single category at €13.4 billion, followed by organic chemicals at €11.9 billion, machinery and mechanical appliances at €8.6 billion, iron and steel at €6.2 billion, and pharmaceutical products at €4.7 billion. The tariff eliminations provide Indian manufacturers preferential access positioning them advantageously in the 450 million-person EU market. Textile and apparel exports from India, which face current EU tariffs ranging from 4% to 26% depending on product classification, will enter duty-free, enhancing competitiveness against producers from Bangladesh, Vietnam, and other competing nations. Leather and footwear producers, concentrated in states like Tamil Nadu and Uttar Pradesh, gain cost advantages that can be passed to European consumers or reinvested in quality improvements and capacity expansion.

Gems and jewelry, a sector where India commands global expertise particularly in diamond cutting and polishing centered in Gujarat, sees complete tariff elimination enabling Indian exporters to compete on equal footing with duty-free competitors. Marine products including shrimp, fish, and seafood from India’s extensive coastline gain unfettered access to European markets known for high-quality seafood consumption. Engineering goods, base metals, mineral products, and chemicals – all major Indian export categories where the country has developed substantial manufacturing capabilities – benefit from enhanced price competitiveness. Indian pharmaceutical exports, already significant at €4.7 billion, gain favorable access to one of the world’s most lucrative markets as European consumers and healthcare systems increasingly rely on generic medicines where Indian companies excel. The agreement’s timing provides Indian exporters with strategic diversification opportunities, allowing them to reduce concentration on any single market while tapping into Europe’s wealthy consumer base and industrial demand.

EU Service Sector Access to India 2026

Data Sources: European Commission, Al Jazeera, Euronews, Business Standard, EU Trade Policy

The EU-India FTA marks a substantial breakthrough in services liberalization – a traditionally protected domain in India’s trade policy. India’s services commitments under this agreement are the most ambitious it has ever undertaken, surpassing concessions granted to partners such as the United Kingdom and Australia. European companies will gain more predictable access to key sectors including financial services, maritime transport, and professional services, with clearer rules on licensing, local presence requirements, senior management, and board composition. The European Commission reports that total EU services exports to India reached €26 billion in 2024, a figure expected to grow substantially under the new legal framework and market access conditions introduced by the FTA.

Financial services represent a particularly significant breakthrough, with the agreement containing the most ambitious commitments on financial services by India in any trade agreement, going beyond what has been offered to other partners. European banks, insurance companies, and securities firms gain enhanced certainty for establishing operations, obtaining licenses, and conducting cross-border transactions. Maritime transport opens to greater European participation in India’s massive shipping and port logistics sector, critical as India expands its role in global supply chains. Professional services including consulting, accounting, legal, and engineering services see reduced barriers, enabling European firms to support their clients’ operations in India or independently pursue Indian business opportunities.

Overall, the EU is giving India access to 144 services subsectors while India is opening 102 subsectors to the EU, including in financial, maritime, and telecommunications industries. For small and medium-sized enterprises (SMEs), the agreement is specifically designed to address structural disadvantages that often prevent smaller firms from benefiting from trade deals, including reduced documentation requirements, expedited customs procedures, and clearer regulatory frameworks. European service providers compete in a market where EU services imports from India totaled €33.8 billion in 2024, dominated by Indian IT services, business process outsourcing, software development, and professional services – sectors where India has established global leadership. The services provisions create a more balanced, mutually beneficial framework where European financial, maritime, and business services gain access to India’s expanding economy while acknowledging and facilitating India’s continued strength in technology and outsourcing services.

Investment and Economic Cooperation 2026

Data Sources: European Commission, EU Trade Policy, Business Standard, Indian Government

EU foreign direct investment stock in India reached €140.1 billion in 2023, up dramatically from €82.3 billion in 2019, representing 70% growth in just four years and establishing the European Union as a leading foreign investor in the Indian economy. This substantial investment flows into diverse sectors including manufacturing, technology, pharmaceuticals, automotive, renewable energy, and services. The stock of India’s FDI in the EU stood at €10.3 billion, reflecting Indian companies’ growing international presence particularly in IT services, pharmaceuticals, and automotive components. Approximately 6,000 European companies operate in India across all sectors, ranging from major multinationals to specialized SMEs, collectively supporting approximately 800,000 jobs in the European Union through trade and investment linkages.

The free trade agreement provides enhanced investment protection and regulatory certainty that should accelerate both European investment into India and Indian investment into Europe. Parallel to the FTA, the EU and India continue negotiating a separate Investment Protection Agreement that will establish state-of-the-art dispute settlement mechanisms and enforce clear rules for protecting foreign investments. The two sides are also negotiating a Geographical Indications (GI) Agreement that will support rural communities and help preserve cultural and culinary heritage on both sides while assuring consumers access to quality authentic products and promoting geographical indications globally. Examples include protection for European products like Champagne, Parmigiano Reggiano, Scotch Whisky, and Indian products like Darjeeling tea, Basmati rice, and traditional handicrafts.

Leaders committed to scaling up Team Europe Global Gateway investments in India with the European Investment Bank (EIB) as a key partner, focusing on infrastructure, green technology, and digital transformation. At the India-EU Business Forum, European Commission President von der Leyen announced a new initiative called Blue Valleys, aimed at boosting industrial cooperation in strategic sectors by connecting businesses, regulators, and investors, with a successful pilot project tested in Assam. The two sides agreed to strengthen resilience of semiconductor supply chains, promote collaboration in research and development for chip design, deepen cooperation on early-warning systems for active pharmaceutical ingredients (APIs), and improve contingency planning for agrifood supply chains. Subject to budgetary rules, €500 million in EU support over the next two years is envisaged to help India’s efforts to reduce greenhouse gas emissions and accelerate long-term sustainable industrial transformation, demonstrating that the partnership extends far beyond simple tariff reductions to encompass strategic economic cooperation.

Sustainability and Environmental Provisions 2026

Data Sources: European Commission, Business Standard, EU-India FTA Chapter Summary, European Commission Cyprus

The EU-India FTA includes a comprehensive Trade and Sustainable Development (TSD) chapter that enhances environmental protection, addresses climate change, protects workers’ rights, supports women’s empowerment, and ensures effective implementation through dedicated platforms for dialogue and cooperation. Both India and the EU commit to working together on climate change issues including renewable energies, reducing emissions in the maritime sector, and sustainable management of natural resources including marine resources and forests. The agreement promotes cooperation to encourage the shift to a circular and resource-efficient economy, moving away from linear “take-make-dispose” models toward systems that minimize waste and maximize resource reuse.

Through its market access commitments, the deal makes trade and investment in low-carbon goods, services, and technology easier through reduced tariffs on green goods and liberalization of services sectors relevant for the green transition. These goods and services contribute to achieving environmental and climate goals by preventing, limiting, minimizing or remediating environmental damage to water, air, and soil, and by contributing to dissemination of technologies that mitigate climate change. The EU and India signed a Memorandum of Understanding establishing an EU-India platform for cooperation and support on climate action, scheduled to launch in the first half of 2026. Subject to budgetary rules, €500 million in EU support over the next two years is envisaged to help India’s efforts to reduce greenhouse gas emissions and accelerate its long-term sustainable industrial transformation.

Both parties commit to the implementation of Multilateral Environmental Agreements (MEAs) that each has ratified, ensuring that trade liberalization doesn’t undermine environmental protections. The agreement protects both parties’ right to regulate and ensures that neither will weaken, waive, or fail to enforce their laws to encourage trade or investment – crucial safeguards against a “race to the bottom” in environmental or labor standards. The TSD chapter offers civil society organizations an active role to monitor implementation, ensuring transparency and accountability. On labor rights, the deal requires respect for core International Labour Organization (ILO) principles covering freedom of association and collective bargaining, elimination of forced and compulsory labor, abolition of child labor, and elimination of employment discrimination. The TSD chapter includes a broad range of commitments and cooperation provisions on decent working conditions, labor inspection, social dialogue, and promotion of responsible business conduct, demonstrating that the EU-India partnership aims to raise standards rather than simply eliminate tariffs.

Implementation Timeline and Legal Framework 2026

Data Sources: Reuters, Indian Government Officials, European Commission, Al Jazeera, Tribune India

Although negotiations for the EU-India free trade agreement were successfully concluded on January 27, 2026, the deal still requires extensive legal vetting and formal ratification processes before entering into force. Indian Commerce Secretary Rajesh Agrawal stated that legal scrubbing of the FTA text is underway with the endeavor to complete processes and sign the pact at an early date. Reuters reported, quoting an Indian government official familiar with the matter, that formal signing will take place after legal vetting expected to last five to six months, with the deal anticipated to be implemented within a year – suggesting late 2026 or early 2027 for entry into force.

The legal vetting process involves technical experts from both sides reviewing the entire agreement text to ensure consistency, clarity, and legal soundness across all 24 chapters covering trade in goods, services, investment, intellectual property, competition, sustainable development, and numerous other areas. The text must then be translated into all 24 official languages of the European Union, a substantial undertaking for an agreement of this complexity and scope. Following translation and finalization, the agreement requires approval by the European Parliament, the EU Council (representing all 27 member states), and ratification by individual member states according to their constitutional requirements. In India, the agreement must be approved by the Cabinet and potentially Parliament depending on the nature and scope of commitments.

Indian tariffs on 30% of goods imported from the EU will fall to zero immediately upon the agreement’s entry into force, providing instant benefits to European exporters. The remaining tariff reductions are phased over periods ranging from five to ten years depending on product sensitivity, with most liberalization complete within a decade. The agreement establishes a complex structure of tariff-rate quotas (TRQs), staged reductions, and sector-specific timelines designed to balance ambition with political and economic sensitivities on both sides. Automobiles, for example, see gradual tariff reductions from 110% to 10% with annual quotas, while electric vehicles remain protected for the first five years before quotas apply. Once fully operational, the agreement will govern trade worth over €180 billion annually in goods and services, supporting close to 800,000 jobs in the EU and millions more in India.

Disclaimer: This research report is compiled from publicly available sources. While reasonable efforts have been made to ensure accuracy, no representation or warranty, express or implied, is given as to the completeness or reliability of the information. We accept no liability for any errors, omissions, losses, or damages of any kind arising from the use of this report.

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