India and the European Union have put out the first detailed breakdown of their newly concluded free trade agreement and the numbers show just how sweeping the tariff cuts will be across key European export sectors. The changes are set to reshape parts of India’s import market over the next decade.
The biggest headline is autos. India will gradually cut tariffs on European cars to 10%, a huge drop from an effective duty load that often reaches about 70% today. A quota of 2,50,000 vehicles a year will apply through the transition. The EU says this alone could reset India’s premium car market.
The deal goes much wider. Tariffs on more than 90% of EU goods entering India will be eliminated or reduced. Brussels expects the agreement to double EU exports to India by 2032 and save up to 4 billion euros a year in duties. Machinery that currently faces tariffs of up to 44%, chemicals up to 22% and pharmaceuticals around 11% will see most of these duties eliminated.
Aircraft and spacecraft will get near blanket tariff removal. Chemicals will see elimination across almost all product lines. Optical, medical and surgical equipment will see tariffs removed for 90% of products which could lower costs for hospitals and diagnostics in India.
Food and beverages get a major reset too. India will cut tariffs on European wine to 20–30%, spirits to 40% and beer to 50%. Tariffs on olive oil, margarine and vegetable oils from the EU will be cut or eliminated. Medical equipment is another big gainer with tariffs headed to zero across nearly all items.
On services the EU has secured privileged access in financial and maritime services. Brussels is pitching this as a major breakthrough in a sector where India has traditionally moved slowly on opening up.
The EU has also committed 500 million euros over the next two years to support India’s efforts to cut greenhouse gas emissions and push climate friendly investments.
The European Union will lower import duties on 99.5% of traded goods over a seven-year period. This includes bringing tariffs down to zero on Indian marine products, leather and textile goods, chemicals, rubber, base metals, and gems and jewellery, according to a statement from India’s trade ministry.
Overall the EU says the trade deal will open India more deeply than ever to European exporters while strengthening Europe’s foothold in one of the world’s fastest growing consumer markets. For India the spotlight now shifts to how domestic players in autos machinery chemicals and medical devices will adapt to tougher European competition.
