India and EU clinch landmark free trade deal, pledging major tariff cuts and mobility cooperation
After nearly two decades of negotiations, India and the European Union have finalised a far-reaching trade agreement that reduces tariffs on most goods, expands market access for exporters on both sides, and includes a parallel mobility arrangement.
India and the European Union on Tuesday, January 27, 2026, announced they have reached a long‑awaited free trade agreement, ending years of stop‑start negotiations and setting out a phased plan to reduce tariffs on most goods traded between the two partners. The pact is being positioned as both an economic deal and a strategic alignment, as New Delhi and Brussels look to deepen ties amid global trade uncertainty.
According to details reported by Reuters, the agreement is designed to eliminate or reduce tariffs across 96.6% of traded goods by value for EU exports into India, while the EU is set to cut tariffs on 99.5% of goods imported from India over a multi‑year schedule. EU estimates cited in the report suggest the package could save European companies around €4 billion annually in duties and may help EU exports to India expand significantly by 2032 if implementation proceeds as planned.
Sectorally, the deal aims to open opportunities for Indian exporters in categories such as textiles, leather, gems and jewellery, chemicals and marine products, while providing EU firms improved access in areas including machinery, chemicals and selected premium categories. At the same time, sensitive agricultural items have been kept outside the agreement’s scope, reflecting political sensitivities on both sides and the need to protect domestic producers in high‑impact segments.
The broader package also includes a mobility component intended to facilitate movement for categories such as students and workers, alongside cooperation frameworks that both sides describe as supporting long‑term partnership building. The agreement still needs to move through formal processes such as legal text finalisation and ratification steps before it can fully take effect, with timelines depending on approvals in India and across EU institutions.
- Deal announced: January 27, 2026
- Core feature: phased tariff reduction on most traded goods
- Sensitive farm items: excluded from coverage
- Next steps: legal finalisation and ratification/approvals