The newly detailed India–EU free trade agreement marks one of the most ambitious market-opening exercises India has undertaken in decades. The standout change is in automobiles, where tariffs on European cars will be gradually reduced to 10% from levels that currently reach nearly 70%, subject to an annual quota of 2,50,000 vehicles. The European Union believes this alone could fundamentally reset India’s premium automobile market.
Beyond autos, the agreement eliminates or reduces tariffs on more than 90% of EU exports to India. Machinery, chemicals, pharmaceuticals, aircraft, and medical equipment will see duties largely cut to zero, significantly lowering input costs for Indian industry and healthcare providers. Food and beverage imports—including wine, spirits, beer, olive oil and vegetable oils—will also see steep tariff reductions.
In return, the EU will phase out duties on 99.5% of Indian goods over seven years, covering textiles, leather, marine products, gems and jewellery, and industrial goods. The deal also opens doors for European financial and maritime services while committing EU funding to support India’s climate transition. As implementation begins, attention will turn to how Indian manufacturers adapt to deeper European competition in key sectors.
