India-EU Trade Deal FAQs: Which Items Will See Zero Duty or Big Price Drop?

The India-EU Free Trade Agreement (FTA), signed at the 16th India-EU Summit, is expected to reshape trade between the two regions and make many goods and services more affordable for consumers and businesses. Here's what you need to know after the India and the European Union (EU) have signed a FTA:

India-EU FTA: Which European goods will cost less in India?

European wines, spirits, and beer face high import duties today-up to 150% on some products. After the FTA:

• Premium wines: Duty drops from 150% to 20%
• Spirits: Duty falls from 150% to 40%
• Beer: Duty reduces from 110% to 50%

European cars will also become cheaper. Premium vehicles from BMW, Mercedes, and Porsche currently attract a 110% import duty, but under the deal, tariffs will fall to 10% for selected high-end cars, with a quota of 2.5 lakh vehicles per year.

Industrial machinery and electrical equipment from Europe, currently facing duties of up to 44%, will largely be duty-free. Similarly, aircraft, medical and surgical equipment, plastics, chemicals, iron and steel, and pharmaceuticals will see most duties eliminated.

India-EU Trade: Which Indian products will benefit in Europe?

Indian goods exported to the EU, valued at around ₹6.8 lakh crore in 2025, will get easier access with reduced or zero tariffs on over 90% of products. Key beneficiaries include:

• Textiles and leather goods (EU currently charges 10%)
• Pharmaceuticals (currently 11%)
• Chemicals (up to 22% duty)

With lower tariffs, Indian products will be more competitive in European markets, helping boost sales, production, and jobs.

India-EU FTA: How will this impact farmers?

EU tariffs on agricultural goods exported from Europe to India will fall significantly:

• Olive oil and vegetable oils: Duty drops from 45% to 0%
• Kiwis and pears: 33% drops to 10% (in quota)
• Wine: From 150% to 20-30%
• Beer: From 110% to 50%
• Sausages and processed meats: From 110% to 50%

This opens a large market for European farmers while sensitive items like beef, sugar, and rice remain protected.

India-EU Trade: How much money will businesses save?

European exporters are expected to save up to €4 billion per year in duties. For India, reduced tariffs and simplified approvals will help exporters of textiles, leather, pharmaceuticals, and chemicals recover from recent US tariff shocks, potentially preventing a loss of around ₹3 lakh crore in key sectors.

India-EU FTA: What about services and small businesses?

EU companies will get preferential access to India's financial, IT, maritime, and other services sectors. Small businesses in both regions will benefit from simpler rules, predictable regulations, and easier trade procedures.

How will consumers notice the change?

Indian buyers can expect European products like wines, spirits, cars, and industrial equipment to become noticeably cheaper. Similarly, European consumers will see Indian textiles, leather, pharmaceuticals, and processed foods become more affordable.

What about sustainability and safety?

All imports must comply with strict EU and Indian health and safety standards. The agreement also promotes climate protection, fair labour practices, and women's economic empowerment.

The benefits, including lower tariffs, improved market access, and cheaper goods, will start rolling out once both India and the EU ratify the agreement and implement the tariff reductions. Many changes, especially for high-duty items, could be visible within a few years.

India-EU FTA: How will EU industry benefit?

India-EU FTA: How will EU farmers benefit?

This FTA connects India with the EU, a group that pulls in about a quarter of global GDP and handles a third of all world trade. It’s a big step alongside India’s current agreements with Britain and the European Free Trade Association.