India-EU FTA finalised: Top 15 frequently asked questions on trade deal answered

India-EU FTA sealed: India and the European Union on Tuesday announced the conclusion of a free trade agreement that is widely being described as the “mother of all deals”. The deal comes at a time of heightened global uncertainty and trade disruptions driven largely by Donald Trump’s tariff policies. Calling it the largest FTA India has ever signed, Prime Minister Narendra Modi said the landmark pact was finalised following summit-level discussions with European Commission President Ursula von der Leyen and European Council President Antonio Costa, who represent the 27-member bloc.“This is not just a trade agreement. This is a new blueprint for shared prosperity,” Modi said in a media statement, underlining the broader strategic significance of the accord. Alongside the trade pact, the two sides also formalised a strategic defence partnership and concluded a mobility agreement, reinforcing cooperation beyond commerce.Costa said the agreement marked the start of a “new chapter” in India–EU relations, spanning trade, security and people-to-people engagement. Emphasising its scale, he noted that trade agreements strengthen a rules-based economic system and foster shared growth, adding that the pact ranks among the most ambitious ever signed. Von der Leyen echoed the sentiment, saying, “We delivered the mother of all deals.”

India-EU FTA: FAQs Answered

What does the India-EU FTA mean for the two economic blocks? Here are the top FAQs answered:1. Why has the EU negotiated a Free Trade Agreement (FTA) with India?The deal will strengthen economic and political ties between the world’s two largest democracies at a time of rising geopolitical tensions and global economic challenges.India is the world’s fourth-largest economy with the world’s largest population. Despite this, EU exports there are relatively low compared to our exports elsewhere. This is due to very high tariffs amongst others.The deal will reduce tariffs and administrative burdens, making trading easier, cheaper and faster. This will help EU companies and farmers export more. EU exports to India already support 800,000 European jobs and the export growth can contribute to even more.2. How is the agreement going to affect EU exports? The agreement is expected to double EU exports to India. Additionally, enhanced access to the Indian services market, particularly in financial services, maritime services, and other key sectors, will open new business opportunities and foster job creation.3. What are the key benefits for EU exporters under this agreement?

4. How does the agreement benefit EU industry? India will grant the EU tariff reductions that none of its other trading partners have received, dramatically improving market access for EU exports. For example, tariffs on cars will gradually go down from 110% to 10% with a quota of 250,000 vehicles a year. High tariffs of up to 44% on machinery, 22% on chemicals and 11% on pharmaceuticals will be mostly eliminated.Examples for EU industrial sectors that will benefit:

5. How does the agreement benefits EU farmers?The agreement removes or reduces often prohibitive tariffs (over 36% on average) on EU exports of agri-food products, opening a massive market to European farmers. Sensitive European agricultural sectors such as beef, sugar or rice will not be liberalised at all.Examples of EU agri-food sectors that will benefit:

The EU and India are currently negotiating a separate agreement on Geographical Indications (GIs), which will help traditional EU farming products sell more in India, by removing unfair competition in the form of imitations.6. How will the agreement help EU service providers? The agreement will grant EU companies privileged access to the Indian services market, including key sectors such as financial services and maritime services. It has the most ambitious commitments on financial services by India in any trade agreement, going beyond what they have given to other partners.7. How will the agreement help small businesses? The deal has a dedicated chapter to help small businesses. They will be able to easily access all information on doing and setting up business in the EU and India. SME contact points will work on making trading easier for small companies. The tariff reductions, removal of regulatory barriers, transparency, stable and predictable rules will help companies import-export in a cheaper, simpler and more effective way.8. How will the agreement promote sustainable trade? Dedicated sustainability provisions will enhance environment and climate protection, promote the protection of workers’ rights and support women’s empowerment, strengthen dialogue and cooperation, ensure effective implementation mechanism.9. How will the agreement protect workers’ rights and women’s empowerment? The agreement requires respect for the core International Labour Organisation principles and includes legally binding commitments on issues such as decent working conditions, labour inspection, and responsible business conduct. It contains provisions on UN and ILO conventions advancing women’s economic empowerment and gender equality.10. How will the agreement support the green transition?Both the EU and India commit to work together on climate change issues and the sustainable management of natural resources and to work towards implementing agreements such as the Paris Agreement, the Convention on Biological Diversity and the Convention on International Trade in Endangered Species of Wild Fauna and Flora.11. How will the sustainability commitments in the agreement be enforced?Many of the commitments on Trade and Sustainable Development are legally binding and enforceable through a dedicated consultation mechanism. The mechanism will provide an avenue to address labour, environmental and gender equality issues in a sustainable and inclusive matter, so that improvement is achieved on the ground, and not just on paper.12. How will the deal avoid that products of non-Indian origin are imported into the EU through India just to benefit from the tariffs?The EU and India have agreed rules of origin that ensure that only products that have been significantly processed in one of the parties can benefit from the tariff preferences of the agreement. This will help avoid, that other countries simply export to India and reexport to the EU benefit of the tariffs.13. What does the FTA do to cut red tape?The EU and India agreed simplified procedures, to maintain a transparent and predictable regulatory environment and ensure quicker release of goods at customs. These will all make actual exporting/importing easier, quicker and cheaper. We also agreed with India to deepen cooperation on supply chain security and to strengthen risk management and controls at the EU border.14. How does the deal protect EU health and safety?All imports from India to the EU will continue to be subject to the EU’s strict health and product safety rules, with no exception. The EU is ensuring compliance through controls. Furthermore, the deal creates a framework to cooperate on strengthening policies and defining programs that contribute to the development of sustainable, inclusive, healthy and resilient food systems and to jointly engage in the transition towards sustainable food systems.15. How does the agreement promote digital trade?The chapter on digital trade contributes to a predictable, secure, and fair digital trade environment. It provides rules that build consumer trust and ensure legal certainty for business and support innovation while maintaining the right to regulate for public policy, privacy, and security and deepening EU-India cooperation in the digital economy.16. How does the agreement ensure the protection of intellectual property?The agreement provides a high level of protection and enforcement of intellectual property rights, including with respect to copyright, trademarks, designs, protection of trade secrets and undisclosed information, plant varieties. It also requires measures, procedures and remedies to ensure the enforcement of intellectual property rights.17. How does the deal help address disagreements on trade?The so-called “dispute settlement” mechanism will help avoid or settle efficiently any disagreement concerning the agreement. Independent panels will decide on the disputes. A pre-established list of experts will ensure that panels can start working quickly. Panel reports will be binding and can be enforced through suspension of concessions. All procedures and hearing will be fully transparent. Mediation is also possible, making the process even quicker.18. What needs to happen for the deal to start working?Here are the steps the EU still needs to take:

Once India also ratifies the Agreement, it can enter into force.