By Naraway
In this article
On 27 January 2026, at the 16th India-EU Summit in New Delhi, the two sides announced the conclusion of a free trade agreement that the European Commission called the largest either has concluded. Both governments call it the "mother of all deals". Ten months later, it is still waiting to be signed.
Cars, Wine and Spirits
Cars
110% to as low as 10%, within a 250,000-unit quota. Cars under about Rs 25 lakh are excluded.
Wine
Tiered cuts with quotas: about 20% for premium wine, 30% for mid-priced. No concession below EUR 2.5.
Spirits
150% to about 40%.
Indian exports
Largest gains in textiles, apparel, leather, marine products, gems and jewellery.
Sources: ThePrint; Outlook Business. Reported wine tiers differ between sources.
Services and Investment
India agreed to open 102 services subsectors, including telecommunications, maritime, financial and environmental services. Investment protection sits outside the FTA: a stand-alone investment protection agreement was still being negotiated when the trade deal concluded.
Timeline
| Date | Step |
|---|---|
| 27 January 2026 | Negotiations concluded, New Delhi |
| December 2026 (target) | Signature, expected during a visit to Brussels |
| February-March 2027 (target) | Entry into force, after European Council approval |
Source: SteelOrbis, citing Commerce Minister Piyush Goyal.
Why It Matters for European Businesses
Germany's registrations of new foreign companies in India went from one in FY25 to eight in FY26, before the agreement takes effect. The car quota, spirits cuts and services openings change the economics for sectors that have so far treated India as a high-tariff market.
Part of Naraway's research series India Market Entry in 2026.
In short
India and the European Union concluded negotiations on their free trade agreement on 27 January 2026 at the 16th India-EU Summit in New Delhi. The EU will remove duties on over 90% of tariff lines (91% of trade value) and India on 86% (93% of trade value). Car duties fall from 110% to as low as 10% within a 250,000-unit quota; spirits fall to about 40%. Signing is targeted for December 2026 and entry into force for February-March 2027. A separate investment protection agreement was still outstanding at conclusion.
- Concluded 27 January 2026; signing targeted for December 2026.
- EU removes duties on over 90% of tariff lines; India on 86%.
- Cars: 110% to as low as 10%, within a 250,000-unit quota.
- India opens 102 services subsectors, including telecom, maritime and financial services.
- The investment protection agreement is negotiated separately.
Sources
- India-EU FTA: who gains what, when it will be signed, Outlook Business
- India, EU conclude FTA talks: zero duty for apparel, chemicals; concessional access for cars, wines, ThePrint
- EU-India FTA: the next big trade shift, CMS
- India-EU FTA to be signed in Dec 2026, to take effect from Feb-Mar 2027, SteelOrbis
Frequently Asked Questions
Has the India-EU FTA been signed?
Not yet. Negotiations concluded on 27 January 2026; both sides are targeting signature in December 2026 and entry into force in February-March 2027.
How much does India cut tariffs on EU goods?
India eliminates duties on 86% of tariff lines, covering 93% of trade value. The EU eliminates duties on over 90% of lines, covering 91% of trade value.
What happens to car tariffs?
Duties fall from 110% to as low as 10% within a quota of 250,000 units. Cars priced below about Rs 25 lakh are excluded.
What happens to wine and spirits?
Spirits fall to about 40%. Wine gets tiered cuts with quotas; reported rates are about 20% for premium wine and 30% for mid-priced wine, with no concession below EUR 2.5 a bottle.
Does the FTA cover investment protection?
No. A separate investment protection agreement was still outstanding when the FTA was concluded.
