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The European Union and India have concluded a landmark trade agreement that will significantly reduce tariffs and deepen economic ties between the two economies. Described by the European Commission as the largest trade pact ever agreed by either side, the deal will remove or reduce tariffs on 96.6 per cent of EU exports to India, with the potential to substantially increase bilateral trade flows.

Under the agreement, tariffs on a wide range of EU goods – including machinery, vehicles, chemicals, pharmaceuticals and selected food and drink products – will be phased down or eliminated. Indian tariffs on EU cars will be gradually reduced from 110 per cent to 10 per cent under a quota system, while levies on steel, iron and machinery will be phased out over longer transition periods. Sensitive agricultural sectors on both sides, including dairy, sugar and certain meats, have been excluded.

In return, more than 99 per cent of Indian exports, valued at around $75 billion, will gain preferential access to the EU market. The agreement also includes provisions to strengthen regulatory cooperation, streamline customs procedures and support trade facilitation.

The deal comes amid heightened global trade uncertainty and reflects efforts by both sides to diversify partnerships and reinforce economic resilience. Despite the fact we are amidst a period of global economic uncertainty, for India, a key member of the Commonwealth, the agreement underscores ongoing efforts to expand market access, attract investment and strengthen its position in global trade.