India and the European Union have moved a major step closer to finalising their landmark Free Trade Agreement, with the European Commission formally sending its proposal to the European Council for approval. The move marks an important stage in the long-running effort to deepen economic ties between India and the 27-nation bloc.
The proposed agreement is expected to become one of the most significant trade pacts for both sides. Once approved and implemented, it will reduce or eliminate tariffs on a large share of goods traded between India and the EU, while also improving market access and cooperation in services and other areas.
Under the proposed deal, tariffs on around 96 per cent of EU goods exports to India would be eliminated or reduced. The European Commission estimates that the tariff changes could save European exporters around €4 billion every year and provide a boost to businesses and employment across the bloc.
India is also expected to gain greater access to the huge European market. Indian exporters in sectors such as textiles, chemicals, engineering goods and other industries could benefit from lower trade barriers and improved access to European consumers.
The agreement covers much more than tariffs. It includes provisions relating to services, technical trade barriers, customs procedures, investment and the movement of skilled professionals. The deal is therefore being viewed as a broader economic partnership rather than simply a conventional tariff-reduction agreement.
The latest development follows the political agreement reached between India and the EU earlier in 2026. After the negotiations and legal drafting were completed, the European Commission moved to seek formal approval from the European Council. The agreement will still need to pass through the required European and Indian approval procedures before it can fully enter into force.
The trade pact comes at a time when both India and Europe are looking to strengthen their economic resilience and diversify their supply chains. Growing dependence on China for several products and strategic materials, along with uncertainty in global trade, has encouraged both sides to seek stronger partnerships with one another.
For European companies, India represents one of the world’s fastest-growing major economies and a huge potential consumer market. European automobile manufacturers, machinery companies, technology firms and other businesses could benefit from improved access to India under the agreement. The proposed pact also includes tariff concessions covering sectors such as automobiles, wine and agricultural products.
For India, closer access to the European market could provide a major opportunity to expand exports and attract investment. Indian companies could gain stronger access to European consumers while the agreement could also encourage European investment in India’s manufacturing and services sectors.
The agreement is also significant from a geopolitical perspective. With global trade increasingly affected by tensions between major powers, India and the EU have a shared interest in building more diversified and reliable economic relationships. The deal could consequently strengthen not only trade ties but also the broader strategic partnership between New Delhi and Brussels.
Another recent development underlines the sensitivity surrounding the negotiations. The EU abandoned a proposed 15 per cent export duty on aluminium scrap after concerns that the measure could complicate the India trade agreement. India is a major buyer of European aluminium scrap, accounting for roughly one-third of EU exports of the material.
The final approval process will now be closely watched by businesses on both sides. If the European Council gives its approval and the remaining procedures are completed, the agreement could enter into force after the necessary ratification steps, potentially opening a new phase in India-EU economic relations.
For India and Europe, the agreement represents the culmination of years of negotiations and could reshape bilateral trade by reducing barriers, expanding market opportunities and encouraging greater investment. With the European Commission now seeking the Council’s approval, the landmark pact appears closer than ever to becoming a reality.