On January 27, the European Union and India announced that they had concluded negotiations on their free trade agreement at a summit in New Delhi. In everyday language, this means that the content of the agreement has been finalized, but that the treaty has not yet been legally finalized, formally signed, and, above all, has not yet entered into force: there are still stages of "legal scrubbing," translation, and institutional approvals to go through before it can be implemented.
These are lengthy negotiations, as the saga is not a recent one. The project dates back to 2007, when discussions between the EU and India began. There was a long hiatus from 2013 to 2022, when the geopolitical and economic context became more favorable to a rapprochement between the two parties and the process was put back on track.
Okay, but in practical terms, what does that mean in terms of customs duties? Clearly, the core of the agreement is based on a very significant reduction in customs duties on both sides. And this will be achieved through a two-stage system, with a massive reduction in duties through the immediate elimination of duties on the vast majority of products, followed by the gradual dismantling of duties in the more sensitive sectors.
The Commission states that the EU will remove duties on more than 90% of tariff lines (91% in value terms) and that, if partial liberalizations are included, coverage would rise to 99.3%. Please note that these figures are not presented as a reality on day 1: the idea is rather to liberalize with a gradual dismantling for certain sectors.
On the Indian side, India will eliminate duties on 86% of tariff lines, representing 93% of value, and eventually 96.6% with partial reductions.
In other words, most traded products will see their tariff barriers fall, but not always from day one, and the point to watch is that this will not always be to zero.
For European exporters, the stakes are high because Indian tariffs are high in many industrial sectors. The Commission emphasizes that the agreement opens up significant reductions in areas such as chemicals, pharmaceuticals, machinery, medical devices, avionics, and automobiles, with reductions often taking effect immediately for certain categories and phased-in schedules of up to ten years depending on the product.
The example of the automotive sector is quite telling: according to the Commission, duties on cars, which currently stand at 110%, would gradually fall to 10% within the framework of an annual quota (250,000 vehicles/year). Similarly, duties on wine, currently at 150%, will fall to 75% when the agreement comes into force and eventually to 20% for premium wines and 30% for mid-range wines. For pasta and chocolate, the rate, which can be as high as 50%, will eventually fall to 0%.
At the European level, the European Commission highlights a telling figure: €4 billion per year in customs duty savings for EU exporters once the agreement comes into force. It adds an estimate of the growth in EU exports to India: these stood at €49 billion in 2024 and are expected to more than double by 2032 (+107.6%).
The question of timing now arises, because at this stage, the agreement will first be published in its negotiated form, then undergo legal review and translation into all official EU languages. It will then be forwarded to the EU Council, which will have to authorize its signature, and to the European Parliament, which will have to give its consent, before a final decision by the Council allowing its conclusion on the EU side. At the same time, India must also finalize its internal ratification procedures. Until all these steps have been completed, the agreement cannot enter into force.
The timetable does not set a fixed date for implementation, but official sources are leaning towards finalizing all these stages in 2026 and bringing the legislation into force shortly thereafter, with the most optimistic estimates suggesting the end of 2026 and the first half of 2027 being more likely . This will be accompanied by a massive tariff reduction from day one, with a gradual rollout over 10 years.
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