India, EU conclude free trade agreement negotiations: Commerce Secretary

India plans steep tariff cut on European cars, BMW and Volkswagen among gainers

India and the European Union have successfully concluded negotiations for the proposed free trade agreement, Commerce Secretary Rajesh Agrawal said on Monday.

Calling the deal balanced and forward-looking from India’s perspective, Agrawal said the agreement would strengthen economic integration between India and the EU and help boost trade and investment flows in both economies.

“Negotiations have been successfully concluded. The deal has been finalised,” he said.

Agrawal added that legal scrubbing of the FTA text is currently underway, with efforts focused on completing procedural formalities and signing the pact at the earliest.

The agreement is expected to be signed later this year and could come into force early next year, he said.

Talks on the India-EU free trade agreement began in 2007 but repeatedly broke down over market access, labour standards, intellectual property and regulatory rules. The negotiations were revived in 2022 and accelerated sharply over the past year amid global trade disruptions and rising protectionism.

Officials say the difference this time is political will. Both New Delhi and Brussels see strategic value in locking in a stable, long-term economic partnership as supply chains are reconfigured and dependence on China is reassessed.

The most eye-catching element of the proposed deal is India’s offer to sharply cut import duties on European cars, according to officials and Reuters.

Fully built cars currently attract tariffs ranging from 70% to 110%. Under the plan being discussed, peak duties on a limited number of EU-made cars priced above 15,000 euros could fall to 40% immediately, with a gradual reduction towards 10% over time.

*With PTI inputs