# India–EU Free Trade Deal: Winners, Losers and NRIs India–EU deal: duties cut on 96.6% of goods traded. What gets cheaper, which Indian exporters gain, why dairy is excluded, and what it means for NRIs By Nikhil Varghese, CA · 3 February 2026 · https://finniki.com/blog/india-eu-free-trade-agreement **Quick answer:** The **India–EU free trade agreement**, concluded in January 2026 after nearly 20 years of talks, will remove or cut duties on about **96.6%** of goods traded between India and the European Union, and over **99%** of Indian exports by value would enter Europe duty-free. Indian textiles, marine products, leather, chemicals and jewellery gain the most; European cars, wine, machinery and processed foods get cheaper in India over several years. Sensitive farm products, including **dairy**, rice, sugar, beef and chicken, are kept out. It still has to be signed and ratified, with entry into force expected around **2027**. *Updated October 2026. Negotiations concluded on 27 January 2026; formal signing is expected by the end of 2026, followed by European Parliament consent. Like the EU–Mercosur deal, it can still be delayed by politics on either side.* [Watch the episode: India–EU free trade deal, opportunity of a lifetime or hidden risk?](https://youtu.be/VX3T3Crd8LM) ## What is the India–EU free trade agreement? It is a deal that removes almost all the "toll booths" on trade between India and the 27 countries of the European Union. Talks began in 2007 and stalled repeatedly over agriculture, car tariffs, intellectual property and services, before both sides concluded them in January 2026. The EU is India's largest trading partner in goods, with about **$136 billion** of trade a year: India exports about $76 billion and imports about $61 billion, a modest surplus. Once fully in force, duties on **96.6%** of goods traded will be eliminated or sharply reduced, worth about **€4 billion** a year in tariff savings for European exporters alone. ## When does the India–EU trade deal come into force? Not yet. The agreement still has to be formally signed, approved by the EU's Council and the European Parliament, and approved in India, so it is expected to take effect around **2027**, with many tariff cuts phased in over years after that. Signing is not the same as ratification: the EU's agreement with the South American Mercosur countries was celebrated, then held up for years by farmer protests, environmental objections and French opposition. Celebrate cautiously. ## Why is it called the "mother of all trade deals"? Three reasons: - **Scale:** the EU is 27 advanced economies with a combined GDP above **$17 trillion**. One deal opens Germany, France, Italy and the Netherlands at once. Together, India and the EU cover close to a quarter of world GDP. - **Depth:** it goes beyond tariffs to supply chains, services and manufacturing, so India is woven into European production rather than just selling to it. - **Timing:** companies are cutting their dependence on China. Apple is moving production to India and European manufacturers want alternatives; the deal strengthens India's case at exactly that moment. Europe is far bigger in trade today: excluding petroleum, India exports about $350 billion of goods a year, the EU about $2.8 trillion. But Europe sells high-value goods (machinery, cars, medicines) while India sells high-volume, lower-value goods (textiles, chemicals, food). The deal is a chance for India to climb that value chain. ## What does India gain from the deal? Duty-free access for its biggest job-creating exports. Nearly **9,400** Indian product categories get zero or near-zero duties in Europe: - **Textiles and apparel:** duties of about **12%** go to zero. - **Marine products:** duties of up to **26%** go to zero. - **Footwear, leather, chemicals, gems and jewellery:** all to zero. ![Indian exports to Europe: textiles lose a 12% duty and seafood up to 26%, and over 99% of exports go duty-free.](https://finniki.com/blog/media/bc9aa0e158edd6e85dba1c9c.jpg) Take a textile exporter in Tirupur. Today, import duty makes his shirt dearer in Germany than one from Vietnam; once it goes, he is competitive. The same holds for leather, seafood, processed food and jewellery, industries that employ millions in small businesses. Some estimates put the extra exports at **$75 billion** over time. The catch: the EU has the world's toughest environmental, labour and quality standards, and meeting them takes investment. Europe is offering the door; India has to build the stairs. The upside is that a business that meets European standards can compete almost anywhere. ## What does Europe get? Access to 1.4 billion consumers with rising spending power, an alternative manufacturing base to China with scale and an English-speaking workforce, and partnerships with India's IT and consulting sectors. More trade may also be settled in euros and rupees, slightly reducing reliance on the dollar. ## What will get cheaper in India? European imports, gradually. The main cuts: - **Cars:** duty of about **110%** falls to **10%**, phased in over years and within a quota of **250,000** vehicles; cheaper cars are excluded. - **Wine:** about **150%** falls to **20 to 30%**, depending on price. - **Beer:** about **110%** falls to **50%**. - **Machinery** (duties up to 44%), **pharmaceuticals and chemicals:** to zero. - **Processed foods** such as chocolate, biscuits and pasta: about **50%** falls to zero over time. - **Olive oil:** duties of up to 45% removed gradually. ![European cars in India: import duty falls from about 110% to 10%, phased in and within a quota.](https://finniki.com/blog/media/73f9bccbb80965d43c65d6d7.jpg) A ₹30,000 European luxury bag could eventually cost far less. But do not expect overnight price crashes: GST and logistics costs remain, and most cuts are phased. The bigger effect is indirect: cheaper European machinery lets Indian manufacturers improve quality at lower cost, and competition pushes Indian brands to get better. ## Who in India will feel the pressure? Businesses that relied on tariff protection rather than value. India kept its most sensitive farm sectors out of the deal entirely: **dairy** (including cheese), rice, sugar, beef and chicken get no tariff cuts, so a small dairy farmer in Gujarat is shielded from subsidised European milk powder and butter. Agriculture was the most sensitive part of the talks because it is about livelihoods, not just economics. The pressure falls instead on sectors that are opening up: Indian chocolate, biscuit and processed-food makers will compete with European brands at similar prices, and local car, wine and machinery makers face cheaper imports. Companies that upgrade will survive; those that lean only on protection will struggle. The market does not care about your legacy, only your value. ## What does the India–EU deal mean for NRIs? It is about India's direction, not cheaper shopping on your next visit. Engineering exports could rise to about **$25 billion** and textile exports from about $7 billion to **$35 to 40 billion**. Stronger exports support the economy, business confidence and asset values, including that flat in Bengaluru. For professionals, it opens roles in IT, consulting, logistics and cross-border trade, where the ability to work in both worlds is an advantage. ![What the deal means for NRIs: stronger exports, support for Indian asset values, and more cross-border careers.](https://finniki.com/blog/media/f119663008d3890c91936afb.jpg) ## Is the India–EU trade deal good for India? It is an open door, not a gift or a threat. Trade deals do not create growth on their own; they create opportunities and reveal who was ready. The Tirupur exporter who upgrades his machines could multiply his business; one who does not adapt will watch competitors take his orders. The real question is how ready Indian businesses are to compete in one of the world's most demanding markets. ## FAQs ### Has the India–EU free trade agreement been signed? Negotiations were concluded on 27 January 2026. Formal signing is expected by the end of 2026, followed by ratification. ### When will the India–EU FTA come into force? It is expected around 2027, after signing and approval by the EU and India, with many tariff cuts phased in over several years. ### Will European cars get cheaper in India? Gradually. The import duty on cars falls from about 110% to 10% over years, within a quota of 250,000 vehicles, and cheaper cars are excluded. ### Is dairy included in the India–EU trade deal? No. Dairy, including cheese, is excluded, along with rice, sugar, beef and chicken. ### Which Indian sectors benefit most? Labour-intensive exporters: textiles and apparel, marine products, leather and footwear, chemicals, and gems and jewellery, which get duty-free access to Europe. ### How does the India–EU deal affect NRIs? Indirectly: stronger exports support India's economy and asset values, and create more cross-border career opportunities. ### Will wine get cheaper in India? Over time. Duty on European wine falls from about 150% to between 20% and 30%, depending on price, within quotas. ## Follow the money, not the headlines Trade deals change where India's growth comes from, and that shapes your investments. [Book a session](https://finniki.com/book) to plan your portfolio, or find more episodes on [FinNiki videos](https://finniki.com/videos).