India and the European Union Reach Landmark Deal to Slash Bilateral Trade Tariffs

India INand the European Union EUconcluded negotiations on a long-awaited free trade agreement on January 27, 2026. This landmark pact eliminates or reduces tariffs on over 90% of bilateral trade between the two parties, representing a combined market of approximately 2 billion people. The agreement is a significant step in trade liberalization as both sides seek to cushion the impact of strained ties with the United States.

Under the terms of the deal, Indian tariffs on 30% of goods traded with the European Unionwill fall to zero immediately. Ultimately, tariffs will be eliminated or reduced on more than 90% of exports from the bloc, a move projected to save firms up to 4 billion euros annually in duties. For Indian exporters, including those in the textile and apparel sector, the European Unionwill scrap all tariffs on 90% of goods at launch, extending zero-tariff access to 93% of products from Indiawithin seven years. In total, 99.5% of all bilateral trade receives some form of tariff concession.