India–EU FTA Signals New Era of Trade, Climate and Strategic Cooperation
The deal is expected to double bilateral trade—currently €124 billion—within five years
India and the European Union have concluded negotiations on a historic Free Trade Agreement (FTA), the largest ever signed by either side. The deal is expected to double bilateral trade—currently €124 billion—within five years, strengthening ties between two major economies amid rising geopolitical uncertainty.
The agreement eliminates or reduces tariffs on nearly 90% of goods, delivering about €4 billion in annual duty savings for European exporters and opening up services gains of up to $35 billion for India. India has offered unprecedented concessions, including cutting car tariffs from 110% to as low as 10% and removing duties on auto parts within a decade. Levies on machinery, chemicals and pharmaceuticals will also be largely phased out.
For India, the FTA provides insulation against global protectionism; for the EU, it secures long-term access to one of the world’s fastest-growing markets in the Indo-Pacific.
Beyond trade, climate cooperation is central to the pact. The European Investment Bank has committed €2 billion to climate-resilient infrastructure in India and joined the Coalition for Disaster Resilient Infrastructure. The Clean Energy and Climate Partnership and the EU–India Trade and Technology Council are deepening collaboration on renewables, clean tech and green hydrogen, with India targeting $10 billion FDI for 10 GW of electrolyser capacity by 2030.
While the EU’s Carbon Border Adjustment Mechanism could cost Indian exporters $2–4 billion annually from 2026, it is also pushing alignment between India’s emerging carbon market and EU standards.
“This deal signals strategic alignment at a moment of high geopolitical uncertainty,” said Aarti Khosla, Founder-Director, Climate Trends. “It shows where money and markets are heading—towards clean tech, green industry and cooperation.”
More than a trade pact, the India–EU FTA lays the groundwork for a broader strategic partnership focused on growth, resilience, energy security and climate action—offering a rare example of constructive multilateralism in a fragmented global economy.
The writer of this article is Dr. Seema Javed, an environmentalist & a communications professional in the field of climate and energy
