Skip to main content
Trade AgreementsConcluded — Early 2026

EU-India Free Trade Agreement 2026 — BTIA Coverage, Tariffs & Impact

The EU-India Broad-based Trade and Investment Agreement (BTIA) was concluded in early 2026, ending 13 years of stalled negotiations. Indian textiles, pharmaceuticals, and leather gain phased duty-free access to the EU. EU vehicles, spirits, machinery, and wine get phased reductions in India's high tariff wall. Together the two sides represent a combined market of over 1.8 billion people.

June 2026·7 min read
Early 2026
Deal concluded
After 13 years of talks
60–100%
India vehicle tariff
Being phased down over 10–15 yrs
→ 0%
Indian textiles EU duty
Phase-in over 7 years
1.8B+
Markets covered
EU + India population

Key Tariff Changes Under the EU-India BTIA

FlowCategoryCurrent dutyAfter FTATimeline
India → EUTextiles & apparel8–12%0% phased7-year phase-in
India → EUPharmaceuticals (generics)0–5%0%0–3 years
India → EUSoftware & IT servicesN/A (services)Improved market accessNegotiated commitments
India → EULeather goods3–9%0% phased5-year phase-in
India → EUGems & jewelry2.5–5%0% phased5-year phase-in
India → EUEngineering goods1.7–4%0%3-year phase-in
EU → IndiaPassenger vehicles60–100%Phased reduction; premium vehicles first10–15 years
EU → IndiaSpirits (Scotch, brandy)150%Phased reduction5-year phase-in
EU → IndiaIndustrial machinery7.5–15%0% phased5-year phase-in
EU → IndiaPharmaceuticals (patented)10–12%0% phased5-year phase-in
EU → IndiaMedical devices7.5–15%0% phased5-year phase-in
EU → IndiaWine & other beverages100–150%Phased reduction7-year phase-in

EU duties are EU MFN rates on Indian goods. India duties are India's applied MFN rates. Phased reductions begin on provisional application date (expected 2026–2027). Rates are indicative — consult official text when published.

EU-India FTA — Frequently Asked Questions

What is the EU-India Free Trade Agreement?

The EU-India Free Trade Agreement — formally called the Broad-based Trade and Investment Agreement (BTIA) — is a comprehensive trade deal covering goods, services, investment, and intellectual property. Negotiations first began in 2007, were suspended in 2013 after stalling over automobiles, spirits, and data protection issues, and were formally relaunched in 2022. The deal was concluded in early 2026. It is expected to increase EU-India bilateral trade (currently ~€115 billion/year) substantially.

What did India give up and what did it gain in this deal?

India agreed to: (1) Reduce vehicle tariffs (currently 60–100%) over 10–15 years — a major concession long demanded by Germany; (2) Reduce spirits tariffs (150%) on Scotch, brandy, and other EU spirits; (3) Improve investment protection for EU companies; (4) Strengthen IP enforcement including pharmaceutical patents. India gained: (1) Zero duties on textiles and apparel going to the EU over 7 years — enormous benefit for India's garment sector; (2) Better pharmaceutical market access; (3) IT services market access in the EU; (4) Recognition of Indian professional qualifications.

When does the EU-India FTA come into force?

The agreement was concluded in early 2026, but entering into full legal force requires ratification by all 27 EU member states' parliaments — a process that typically takes 1–3 years for EU trade agreements. Provisional application covering the goods-trade portions may come sooner, potentially in late 2026 or 2027, pending European Parliament approval. Until then, current MFN tariffs remain in effect between the EU and India.

Does the EU-India FTA affect US importers of Indian goods?

Not directly — it governs EU-India trade. But for US importers sourcing from India: (1) Indian textile and garment manufacturers will gain better EU market access, which may attract investment into Indian manufacturing capacity (positive for US buyers who also source from India — more supply capacity); (2) Indian pharmaceutical companies gain better EU access, which may affect drug pricing globally; (3) EU companies investing in India gain stronger protections, which could improve quality and consistency in Indian manufacturing for export. US import duties on Indian goods are not changed by this agreement.

How does the EU-India deal compare to the US-India trade relationship?

The US and India do not have a free trade agreement. US imports of Indian goods face MFN rates plus the Section 122 surcharge (10% until July 24, 2026), with no Section 301 tariffs (India-specific). The EU-India FTA will give EU buyers a significant tariff advantage over US buyers for Indian goods sold into Europe, particularly in pharmaceuticals, textiles, and leather goods. For Indian exporters, the EU FTA opens a massive duty-free market that was previously subject to 3–12% EU tariffs.

What happens to Indian IT services exports to the EU?

Indian IT services — India's largest export sector — were a key negotiating point. The EU has historically had restrictions on Mode 4 services (professionals temporarily working in the EU). The agreement includes commitments to facilitate intra-company transfers and improve work permit processes for Indian IT professionals in the EU. This does not directly affect tariffs (services don't have tariffs) but improves market access conditions for Indian IT companies like Infosys, TCS, and Wipro serving EU clients.

Related Guides

Calculate Your India Landed Cost (US Import)

Zentria Flow calculates US import duties for Indian goods — MFN rates, Section 122, and MPF — for all HTS codes.

Zentria Brain