(NEW DELHI, INDIA) — India and the European Union concluded negotiations for a Free Relaxed Visa Rules and $100 Billion Deal”>Trade Agreement on January 27, 2026 at the 16th India–EU Summit in New Delhi, in a move both sides framed as a new platform for trade, services and professional mobility.
Prime Minister Narendra Modi attended the summit alongside European Commission President Ursula von der Leyen and European Council President Antonio Costa, after negotiators reached what officials described as a political conclusion of the talks.
Modi called it the “mother of all deals,” linking the pact to opportunities across trade, supply chains, clean tech, and investment.
The agreement aims to bind two large economic blocs that together represent about 25 % of global GDP and nearly two billion consumers, with ambitions that extend beyond tariffs into rules that shape modern cross-border commerce.
India and the European Union said the pact covers goods, services, investment, digital trade and mobility for professionals, targeting deeper regulatory alignment and cooperation in technology.
The conclusion on January 27, 2026 came after nearly 20 years of negotiation, with talks that the parties had paused and later resumed.
Negotiations relaunched 2022 after a 2013 suspension, and the sides finalized the deal after an October 2025 round.
A procedural document marking the negotiation conclusion was signed at the summit, but the parties still need to convert the political agreement into a final legal text through legal and technical work.
The process includes preparation of a consolidated text in the next 2 weeks (late January–early February 2026), followed by legal scrubbing, technical review and translation into EU languages in Q1–Q2 2026, a step expected to take 5-6 months.
Formal signing is expected mid–late 2026, alongside a proposal to the EU Council, approval by the European Parliament, and ratification steps on both sides, including India’s Union Cabinet.
European Union ratification also requires action by EU member states, with the timeline described as mid–late 2026, while India’s government ratification is also expected mid–late 2026.
Entry into force is expected in early 2027, launching phased implementation across goods and services rather than immediate across-the-board changes.
Full tariff liberalisation is set to phase through 2027–2031, and the agreement also builds in staging periods of 5–10 years for sensitive items, reflecting the incremental approach both sides chose.
Under the market access outline described by negotiators, the EU eliminates tariffs on over 90% of lines by value, while India liberalises on about 86% of lines by value.
By value, the coverage is described as 91% value for the EU and 93% value for India, reaching 96.6% and 99.3% overall across all lines.
Most tariff benefits begin applying once the agreement enters into force, but the schedule varies by sector, and joint mechanisms will monitor progressive application as staging periods kick in.
Textiles and apparel sit among the earliest beneficiaries, with EU tariffs mostly eliminated at entry into force, giving Indian exporters improved access across categories such as cotton garments, yarns and apparel.
The outlook presented alongside the agreement said exports to the EU market could grow dramatically, potentially reaching $100 billion by 2030, driven by zero-duty access and tighter integration with European fashion supply chains.
Indian manufacturing hubs such as Tiruppur, Surat, and Ludhiana stand to benefit through expanded global orders, with the prospect of job creation in segments tied to production and logistics.
The agreement’s services provisions also intersect with goods trade, as export growth can increase demand for roles in supply chain management, international marketing and compliance work tied to EU standards.
For gems and jewellery, the pact outlines elimination of EU tariffs on most items, a shift expected to lift price competitiveness for Indian exporters in a sector that employs large workforces across Gujarat, Rajasthan, and Maharashtra.
The sector projection said exports could double to $10 billion within three years of implementation, reflecting both tariff relief and expectations of improved market access once phased schedules start.
The outlook also pointed to competition dynamics with Bangladesh and Vietnam, arguing that lower European duties could narrow gaps that had affected India’s relative position in certain product lines.
Automotive provisions featured some of the sharpest headline tariff movement, with India set to cut tariffs on EU cars from about 110% to as low as 10% over a phased period.
The same sector note cautioned that retail prices may not immediately drop due to exchange rate impacts and local cost structures, even as the tariff trajectory shifts over time.
Auto parts and ancillary suppliers could gain from duty elimination on components, which the sector projection tied to deeper integration into the EU supply chain and potential export growth for Indian manufacturers.
The tariff schedule described components moving more gradually, with parts largely addressed after 5–10 years in some cases, matching the broader pattern of slower changes for more sensitive sectors.
Agriculture and processed food provisions point to preferential access for products including tea, coffee, spices, dry fruits, vegetables and processed food items, with the outlook linking expanded exports to higher rural incomes.
At the same time, sensitive products such as dairy, poultry, and soymeal are protected from liberalisation, a carve-out aimed at safeguarding domestic agriculture as market access expands elsewhere.
Some tariff examples cited alongside the market access plan include olive oil moving from up to 45% to 0 in 5 years, and non-alcoholic beer and fruit juices moving from up to 55% in 5 years.
Processed foods also appear in the examples, including confectionary at 33%, reflecting how parts of the agreement translate into product-specific schedules rather than a single tariff cut.
In industrial goods, the schedule includes phased changes in sectors such as chemicals, pharmaceuticals, machinery, plastics and cosmetics, with India cutting tariffs on chemicals up to 22 % and pharmaceuticals up to 11 % through staged implementation.
The outline also described EU cuts on machinery, with half at entry and the rest moving out to 10 years, while plastics run to 7 years and cosmetics to 5–7 years.
Car parts appear with staging that can extend 5–10 years, underscoring that some supply-chain adjustments will play out over several budget cycles and investment plans.
The agreement’s industrial chapter also links tariff changes to investment and technology flows, with the outlook saying European imports of capital goods and advanced manufacturing technology into India will support “Make in India” initiatives.
Services provisions cover 144 services subsectors, including IT/ITES, finance, education and professional services, and the parties describe the commitments as a route to easier market access and greater regulatory certainty.
The services package also includes mobility for professionals and provisions tied to domestic regulation aligned with WTO approaches, along with references to senior management commitments.
For Indian firms that already sell digital services to Europe, the services framework offers a formal structure around cross-border operations, while the investment and digital trade chapters aim to set common expectations in fast-moving areas.
Digital trade provisions referenced in the outline include source code protection, alongside the broader theme of regulatory alignment meant to reduce friction in cross-border business.
The agreement’s supporters argue that the combined trade and services framework will create pathways for exporters, investors, students, professionals and NRIs who work between India and Europe, particularly once entry into force arrives in early 2027.
The outlook also linked mobility provisions to visa opportunities for skilled professionals, alongside education-related benefits framed as improved access and post-study work opportunities.
It also pointed to implications for Indian professionals on H-1B, L-1, or digital nomad visas, saying expanded prospects in EU markets could come as services market access and mobility frameworks take effect.
Business travel and market visits also feature in the described impact, with reduced barriers for services engagements and cross-border work tied to trade-related projects.
Beyond 🇮🇳 India–🇪🇺 European Union commerce, the outlook tied the deal to India’s positioning with the 🇺🇸 United States, arguing the EU pact provides diversification beyond reliance on traditional partners.
With recent U.S. tariffs on Indian exports influencing competitiveness, the EU deal gives Indian exporters alternative high-income markets and bargaining power in future U.S. trade negotiations, the outlook said.
The same analysis stressed complementarity rather than displacement, saying India–U.S. relations remain robust, particularly in services and tech engagements.
It also described the India–EU framework as setting benchmarks for future trade talks involving the United States, particularly on digital trade, professional mobility and investment protections.
For Indian businesses, the combined tariff schedules and services commitments create a longer planning horizon that runs from early 2027 through 2027–2031, when full tariff liberalisation phases in across most lines.
Export-driven regions and sectors that depend on large workforces, such as textiles and gems, may watch early implementation dates closely because most tariff benefits begin applying once entry into force arrives.
Manufacturers that supply components and industrial inputs could see changes later in the schedule, especially in sectors where staging periods extend 5–10 years and product-level timelines set the pace.
Students and young professionals also fit into the agreement’s projected impact because education and services commitments intersect with hiring plans at exporting firms and with cross-border professional placements in regulated fields.
NRIs and other globally mobile workers could see changes in how employers structure assignments and market-entry strategies, particularly as regulatory certainty expands under the services package.
The agreement’s practical effects now depend on the Q1–Q2 2026 legal work and mid–late 2026 ratification steps, before early 2027 entry into force triggers the first tranche of tariff elimination and services commitments.
As negotiators turn political agreement into legal text, India and the European Union are also framing the deal as a milestone that links trade policy to mobility, education and cross-border careers under a single Free Trade Agreement reached in New Delhi.
India and European Union Seal Free Trade Agreement in New Delhi to Transform Trade
India and the European Union have concluded a milestone Free Trade Agreement at the 16th India-EU Summit. Covering 25% of global GDP, the pact addresses goods, services, and professional mobility. Legal finalization and ratification are slated for 2026, with implementation starting in early 2027. Significant tariff cuts in textiles, gems, and automobiles are expected to boost Indian exports and offer strategic trade diversification.
