The European Union and India have agreed to a massive free trade agreement (FTA) that will slash or eliminate tariffs on most goods.
“The E.U. and India make history today, deepening the partnership between the world's biggest democracies,” European Commission President Ursula von der Leyen said in a release. “We have created a free trade zone of 2 billion people, with both sides set to gain economically. We have sent a signal to the world that rules-based cooperation still delivers great outcomes. And, best of all, this is only the start; we will build on this success and grow our relationship to be even stronger.”
The two sides trade roughly EUR 180 billion (USD 215 billion) in goods and services annually, according to the E.U. The new deal, which was announced 27 January, will eliminate or reduce tariffs on 96.6 percent of E.U. goods by value exported to India. The E.U. said the agreement will save roughly EUR 4 billion (USD 4.8 billion) in annual duties on European products and help double E.U. exports to India by 2032.
“After a year of tireless engagement and more than a decade in the making, we have delivered the biggest FTA ever – a deal like no other. High tariffs down, opportunity unleashed. It proves that hard work pays off, that win-win trade is real, and that genuine partnership – including with my counterpart, Minister Piyush Goyal – is always worth the effort,” Commissioner for Trade and Economic Security, Interinstitutional Relations, and Transparency Maroš Šefčovič said in a statement. “Now, our focus is clear: ensuring businesses reap tangible benefits from this FTA as quickly as possible.”
At the same time, the E.U. is expected to cut tariffs on 99.5 percent of Indian goods.
“Today, India has concluded the largest FTA in its history,” India Prime Minister Shri Narendra Modi said. “This historic agreement will facilitate easier access for our farmers and small enterprises to European markets, create new opportunities in manufacturing, and further strengthen cooperation across our services sectors. Moreover, this FTA will boost investment between India and the European Union, foster new innovation partnerships, and strengthen supply chains at the global level. In other words, this is not merely a trade agreement; it is a new blueprint for shared prosperity.”
While tariffs on “sensitive products” including beef, sugar, ethanol, rice, and poultry will stay in effect, the Indian government claimed marine exports will receive “a major boost” under the new deal. The deal provides Indian exporters preferential access to the E.U. marine market, and the E.U.’s current tariff of 26 percent on seafood from India is set to be zeroed out under the FTA.
“This enhanced market access is expected to significantly improve the competitiveness of India’s marine exports while complementing and strengthening India’s export capacity in the marine sector,” the Indian government claimed. “The FTA will turbo-charge exports of shrimp, frozen fish, and value-added seafood exports, empowering coastal communities in Andhra Pradesh, Gujarat, Kerala, and beyond and India’s blue economy.”
The announcement marks a stark contrast to India’s trade relations with the United States, where U.S. President Donald Trump has imposed tariffs of 50 percent on seafood products imported from India. Indian shrimp producers have since pushed to diversify their customer base, looking to new, less expensive markets to export their products to.
“All seafood exporters of Odisha were in deep trouble as they depend heavily on the U.S. market, which traditionally absorbs the bulk of Indian seafood exports. The FTA with the E.U. has opened a fresh window of opportunity,” Sangram Kumar Das, the president of the Odish chapter of the Seafood Exporters Association of India, told The Times of India. “After the FTA with the E.U., exporters will target European markets more aggressively to revive and sustain the sector.”
The most recent deal with the E.U. follows a deal India also signed with the U.K. last year, eliminating tariffs on many of India’s marine products. At the time of signing, India’s government said the deal could lead to a 70 percent growth in the nation’s seafood exports to the U.K.
