India-EU FTA:In a historic move, India and the European Union (EU) on Tuesday finally announced the wrapping up of negotiations for an ambitious and broad-based free trade agreement (FTA) that will not only make European goods from wines to cars cheaper in India, but will also ease the movement of Indian students and professionals into Europe. However, the next step is now to get the deal ratified in the European Parliament, which remains the “most challenging” task, multiple sources told ABP Live.
At a time when the United States under President Donald Trump has cracked the tariff whip on all of its trading partners, India and the EU had no option but to somehow pull the FTA talks towards the finishing line by lowering their expectations and not insisting on provisions that have stalled the deal for the past 18 years, a senior European diplomat, who has been following the talks closely since the launch of the negotiations in 2007, told ABP Live, on condition of anonymity.
‘Pressure On EU & India’
“There is pressure on both the EU as well as on India, not only from the US but also from China, to look for newer markets and to go for greater trade diversification. This is the reason why, despite India not agreeing to relent on dairy products, the EU agreed to conclude the talks,” the diplomat said.
The diplomat, who has been involved in some of the trade negotiations of the EU with other countries, also said, “The FTA will now be coming under major scrutiny. This is the point from where things get tougher. So for India, the real work begins now in terms of ensuring that the deal gets officially approved. This is going to be the most challenging phase.”
The European Commission President Ursula von der Leyen called it “the mother of all deals,” but it remains a question whether the European Parliament also considers it to be so.
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What’s Next For India-EU FTA?
The FTA will come into force once all internal legal procedures of the EU are completed. The deal will first come under legal review, then it will be translated into all EU official languages, after which formal signing of the pact will take place.
Thereafter, the deal will have to be ratified as per the respective laws of the EU and India. The entire process can take anywhere between six months and a year, according to diplomatic sources.
The final text of the deal will have to be translated into all 24 official EU languages. The European Commission will propose the agreement to the Council of the EU. Once the Council adopts the decision, the EU and India can formally sign the deal, sources said.
Wendy Cutler, Senior Vice President of Washington DC-based Asia Society Policy Institute, said, “With its product exclusions from tariff cuts, long tariff staging periods, and absence of investment provisions, the just announced FTA is ‘lighter’ than many other FTAs … Both also have Washington to thank. After all, US tariff hikes and threats helped to spur Brussels and Delhi to take a fresh look at the outstanding issues, overcome their differences and forge an agreement. Tariff threats from Washington are propelling all sorts of new partnerships without US participation, with more expected this year.”
Cutler added, “This deal still has some serious administrative hoops to go through, particularly in Europe, before it becomes a reality. Let’s hope it doesn’t follow the path of the EU-Mercosur agreement, which now has been subjected to additional legal review, delaying its ratification.”
The EU-Mercosur FTA is currently in a state of high-stakes legal and political gridlock following its formal signing on January 17, 2026, in Asunción, Paraguay. On January 21, 2026, the European Parliament voted (334 to 324) to send the deal to the European Court of Justice (ECJ) for a formal judicial review.
Under the India-EU FTA, New Delhi has committed to bringing down, or even eliminating, tariffs on 96.6 per cent of its merchandise exports to the EU. Similarly, Brussels has said, under the new deal, it will slash duties on 99.5 per cent of Indian goods. However, this reduction or elimination of tariffs will take place in a gradual manner over a period of seven years.
Tariffs will come down substantially on a wide range of products from textiles, alcohol, automobiles and pharmaceuticals. However, sectors such as dairy products, beef, poultry and sugar.
The EU remains India’s largest trading partner for goods, with bilateral trade reaching approximately $136 billion in 2024-25. The EU is also among India’s top overall trading partners in both goods and services.
Commerce and Industry Minister Piyush Goyal has said that the deal is expected to come into force by 2026.
