The European Union and India They closed this Tuesday the largest trade agreement in its history and one of the largest in the world, which the European Commission hopes will allows European exports to double between now and 2032by substantially reducing or eliminating tariff barriers. We analyze the keys to the agreement.
The EU and India are two of the largest economies in the world. In total, they add up to more than 2 billion people and a third of the world’s GDP. The bloc is India’s main trading partner, while for the Twenty-seven, India is the ninth country with which they trade the most.
According to Commission figures, currently The trade flow between the two has a value of 180,000 million euros. With the agreement that the parties have closed today, that figure could bend in the next six years.
India and the EU had almost 20 years negotiating. The negotiations started in 2007, were suspended in 2013 and were later resumed in 2022. under the first Commission of Ursula von der Leyen with completely new texts that allowed start practically from scratch. In February 2025, the German He chose India for his first official trip abroad of his second term.
During that trip, Von der Leyen announced that the negotiations would be closed before the end of the year. “To my horror,” acknowledged a senior European source involved in the process. “I thought it was impossible until we finally did it”he added, also highlighting the role of the European trade commissioner, Maros Sefcovic.
But the truth is that The agreement between the EU and India is best understood in a context of fierce competition and protectionism on the rise. “In this negotiation, as in others, one could say that the EU has gradually and increasingly realized the “absolute need to diversify your business relationships”has recognized a high community source.
“For a long time we have sought reduce the risk derived from excessive dependencefor example, from Chinese imports,” added the same source. This, added to the United States tariff crusade against the world that substantially affected both economieshas done the rest.
In 2024, Trade between both parties amounted to 120,000 million. The agreement reached this Tuesday aims to eliminate or substantially reduce tariffs in various sectors with the aim of boosting exchange between the EU and India. According to Brussels, the agreement will allow the liberalization of India’s trade with the Twenty-seven by 96.6%while for EU trade with the Asian country it will be 99.3%.
The community Executive trusts that this will allow double European exports to India between now and 2032. In addition, it estimates that exporters about 4,000 million euros a year could be saved in tariffsthanks to the reduction or elimination of taxes.
Maybe The sector that benefits the most is the automobile. Car manufacturers will see tariffs reduced from 110% to just 10%. Although this reduction will be progressive, in the next 5 to 10 years, and will be limited to a quota of 250,000 vehicles per year160,000 with combustion engines and 90,000 electric. Even so, it supposes the opening of an important market for the sector.
Other industries that will enjoy the benefits of the deal are machinery manufacturers, one of the sectors that exports the most to India, and that will see how tariffs, which are currently 44%, are eliminated for practically all products. The reductions will also be important for chemicals, steel or iron, from 22% to 0%. Also pharmaceutical products (11% to 0%) or medical devices (27.5% to 0%) will see levies on exports to India significantly reduced.
Yes, also the EU agreement with India includes agricultural products. According to the Commission, the agreement allows eliminate or reduce “often prohibitive” tariffs on exports of agri-food products from the block “opening a massive market to European farmers“.
Some key products for Spanish exporters like wine or olive oil will enjoy a significant reduction. The wine will go from having a tariff of 150% to between 20% and 30%, while olive oil, but also margarine and other vegetable oils, will go from 45% to not being subject to any tax.
Some processed foods such as bread, sweets or pasta, as well as meat products such as sausages, fruits such as pears and kiwis, beer or fruit juices. Brussels defends, however, that This agreement also protects sensitive products for the livestock and agricultural sector such as beef and chicken, rice and sugar are excluded from liberalization in the agreement.
The Commission insists that imports from India will be subject “to the strict health and safety standards of EU products, without exception”. In addition, the pact allows the introduction of safeguards, as Brussels did with the agreement with the Mercosur countries. What the parties have not been able to close, as if the bloc did in the case of the agreement with the Latin American countries, is a deal on the protection of geographical indications to protect unique European products.
Brussels defends, on the one hand, that the deal guarantees clearer and more transparent rules to facilitate exchange between both parties. It will also simplify customs procedures to speed up trade.
On the other hand, the Commission has managed greater access for European companies in the area, for example, of transportation or financial services. At the same time, it has achieved better protection of intellectual property rightsincluding copyrights, trademarks, designs or trade secrets. A key question for Europeans.
Now the Commission must translate the political agreement reached with India into a legal text. This text will then be translated into all official languages so that governments can study it. Once the Twenty-Seven give their approval, as happened with the treaty with Mercosur, India and the EU will be able to sign the agreement. After the ratification process will remain ahead although as soon as India takes the step, it could begin to be applied provisionally.
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