EU banks can open up to 15 branches in India over 4 years under FTA

European Council President Antonio Costa, European Commission President Ursula von der Leyen and Indian Prime Minister Narendra Modi. (REUTERS)

India has agreed to allow banks from the European Union to open up to 15 branches in the country over a four-year period once the proposed trade agreement with the bloc comes into force.

The agreement features a liberalised bank branch licensing framework allowing the expansion from the 12-branch cap previously offered under the General Agreement on Trade in Services (GATS), the Indian government said in a release.

India’s sectoral offers adopt a forward-looking liberalisation approach, factoring in recent reforms such as the allowance of 100 percent foreign direct investment (FDI) in the insurance sector and enhanced FDI limits of up to 74 percent in banking.

In return, Indian banks will not be subject to any numerical limits on opening branches in EU member states, although they will continue to be governed by local regulatory requirements.

Currently, three Indian banks— State Bank of India, Bank of Baroda and Bank of India, maintain branches in the EU, with a combined total of five branches while only one bank, State Bank of India maintains a Representative office in the EU.

From the EU, currently five banks, with a combined strength of 33 branches are operating in India, while 17 banks are maintaining their representative offices.

A government official said that India has not offered market access in legal services under the proposed agreement.

The European Union said in a statement on January 27 that the agreement would grant companies from the 27-nation bloc privileged access to India’s services market, including key sectors such as financial services and maritime transport.

“It has the most ambitious commitments on financial services by India in any trade agreement, going beyond what it has offered to other partners,” the EU said.

The two sides have also agreed to cooperate on fast payments and real-time remittances, leveraging platforms such as India’s UPI.

India has offered an identical cap on bank branch openings to New Zealand under their trade agreement. India and New Zealand concluded negotiations on their Free Trade Agreement on December 22, 2025, following talks that began in March 2025.

India and the EU concluded negotiations on January 27 on what both sides described as a “historic, ambitious and commercially significant” free trade agreement, the largest such deal ever concluded by either side.

Negotiations were first launched in 2007, suspended in 2013 and relaunched in 2022. The 14th and final formal negotiating round took place in October 2025, followed by intersessional discussions at technical and political levels.