India and the European Union Finalize Landmark Trade Agreement to Slash Tariffs
India and the European Union finalized a trade pact on January 27 to cut tariffs on 99.5 percent of goods. This move supported local markets and the rupee.
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India 
INand the European Union 
EUreached a definitive agreement on January 27, 2026, to finalize a landmark trade deal that will eliminate tariffs on 99.5% of goods traded between the two regions over a seven-year period. This long-pending pact aims to significantly reduce or remove levies on various products, including machinery, electrical equipment, and chemicals entering the Indian market from the European Union. The announcement provided immediate support to domestic financial markets following a local holiday on Monday.
INand the European Union EUreached a definitive agreement on January 27, 2026, to finalize a landmark trade deal that will eliminate tariffs on 99.5% of goods traded between the two regions over a seven-year period. This long-pending pact aims to significantly reduce or remove levies on various products, including machinery, electrical equipment, and chemicals entering the Indian market from the European Union. The announcement provided immediate support to domestic financial markets following a local holiday on Monday.The US Dollar / Indian Rupee exchange rate responded positively to the news, closing at 91.72 per dollar on Tuesday. This represented a 0.2% appreciation from the previous closing level recorded on Friday, January 24, when the currency had slumped to an all-time low of 91.9650. While the trade deal acted as a catalyst, market analysts such as Dilip Parmar dilip parmarnoted that the currency also benefited from broad-based dollar-selling interest throughout the trading session.
