India and the European Union are set to sign their long-awaited free trade agreement (FTA) by December this year, with the pact likely to come into force between February and March 2027, according to commerce and industry minister Piyush Goyal.
Timeline and Key Statements
Addressing chartered accountants in Mumbai, Goyal stated: "Now, with almost zero duty, almost the entire European market will be open for us. The EU's FTA will be signed by December and will be effective by February-March," as reported by news agency PTI. The minister also confirmed that Jamieson Greer, the US trade representative, will visit India this week for discussions on the proposed India-US trade pact.
Duty-Free Access and Tariff Changes
The proposed India-EU FTA is expected to provide duty-free access to around 93 per cent of Indian exports to the 27-member European bloc. In return, imports of products such as luxury cars and wines from Europe are expected to become cheaper in India.
| Aspect | Detail |
|---|---|
| Indian exports gaining duty-free access | ~93% of total exports to EU |
| EU products expected to get cheaper | Luxury cars, wines |
Broader Economic Significance
India and the EU together account for around 25 per cent of global GDP and nearly one-third of global trade, making the agreement one of the most significant trade deals negotiated by New Delhi. The two sides had announced the conclusion of negotiations for the agreement on January 27 this year, with officials describing it as the "mother of all deals".
Momentum from G7 Summit
The timeline outlined by Goyal comes days after Prime Minister Narendra Modi met European Commission President Ursula von der Leyen and European Council President Antonio Costa on the sidelines of the G7 Summit. Von der Leyen had also said the India-EU FTA would be signed by the end of 2026. "Since we have concluded the mother of all trade deals, we have been moving fast to deliver on our commitments. We will sign the Free Trade Agreement by the end of the year," she said.
The leaders also discussed accelerating work on an investment agreement, strengthening security and defence cooperation, and advancing the India-Middle East-Europe Economic Corridor (IMEC).
India-Canada Trade Pact
Goyal said that during the G7 Summit, the Canadian Prime Minister expressed a desire to conclude the proposed India-Canada Comprehensive Economic Partnership Agreement (CEPA) within this year. India and Canada held the second round of negotiations for the trade pact in May.
"The whole world is looking towards India," Goyal added.
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