India and the European Union have concluded a landmark free trade agreement that will significantly cut tariffs across automobiles, machinery, chemicals, pharmaceuticals, and medical equipment, reshaping trade flows over the coming decade.
A major highlight is the auto sector, where India will gradually reduce tariffs on European cars to 10 percent from current effective duties that go up to 70 percent, with an annual quota of 2.5 lakh vehicles during the transition period. Over 90 percent of EU goods entering India will see duties eliminated or sharply reduced, including near zero tariffs on medical devices, optical equipment, aircraft components, machinery, chemicals, and pharmaceuticals, a move expected to lower costs for hospitals and industry.
Food and beverages will also see resets, with reduced tariffs on European wine, spirits, beer, olive oil, and vegetable oils. On the services front, the EU gains expanded access in financial and maritime sectors, while India secures near zero duties on 99.5 percent of its exports to the EU over seven years, covering textiles, leather, marine products, chemicals, metals, and gems and jewellery.
The agreement links two major economies representing about a quarter of global GDP, is expected to boost exports on both sides, attract investment, and intensify competition for domestic players in autos, machinery, chemicals, and medical devices.
