India and the European Union have politically concluded the long-awaited Free Trade Agreement (FTA) on January 27, 2026, after nearly 20 years of negotiations. The agreement is expected to come into force in early 2027 following legal scrutiny and ratification by both India and the European Union.
The India-EU FTA aims to strengthen economic cooperation by reducing trade barriers, expanding market access, increasing investment flows, and improving regulatory cooperation between the two sides. The European Union, a bloc of 27 member countries, is one of India’s largest trading partners in goods and services.
Under the European Union’s approval process, the agreement must receive approval from the Council of the European Union and consent from the European Parliament. Legal examination of the negotiated text is currently underway and is expected to conclude by July 2026.
While the main trade agreement covers goods and services, negotiations on a separate Investment Protection Agreement are still continuing. Several European companies have expressed concerns regarding the absence of a comprehensive investment chapter in the current FTA framework.
Trade relations between India and the EU have grown significantly in recent years. Bilateral trade in goods reached nearly USD 136.54 billion during 2024–25, while services trade touched USD 83.10 billion in 2024. The agreement is expected to influence nearly one-third of global trade and impact around 2 billion people worldwide.
The India-EU Free Trade Agreement is considered a major milestone in India’s international trade policy and is expected to boost exports, investment opportunities, and long-term economic cooperation between the two regions.
