EU-India FTA Ratification

By Dr Krzysztof M. Zalewski

(Centre For Intl Relations, Poland)

Against the backdrop of major global geopolitical tensions, the European Union and India continue to move forward with one of their most ambitious economic projects: EU–India Free Trade Agreement (FTA). Negotiations had formally concluded in January 2026, but the treaty is still far from entering into force. Legal verification, translation, ratification, and political approvals are expected to take at least another year.

The FTA forms part of a wider strategic framework between both sides. Alongside trade liberalisation, EU and India have already signed a defence cooperation pact and are negotiating an investment facilitation treaty. Together, these reflect a broader geopolitical objective: strengthening strategic cooperation in an increasingly uncertain international order.

Recall, at EU–India Summit in Delhi this January, leaders announced successful conclusion of negotiations, although the full text wasn’t immediately released because it remained under “legal scrubbing” — process of refining legal language and ensuring compatibility with regulations on both sides.

The complete text was eventually published on February 28, 2026. Ironically, the same day witnessed the outbreak of Persian Gulf conflict following attacks by Israel and US on Iran. As global attention shifted towards Middle East crisis, the agreement received little public discussion. Only after regional situation stabilised did attention return.

Lengthy Ratification Process

The ratification process on the European side is expected to be lengthy and politically sensitive. The agreement must first be translated into all official EU languages. The European Commission (EC) will then request approval from the Council of European Union to sign the agreement. All member states must consent before the signing ceremony can take place.

After signature, the agreement will move to European Parliament, which can either approve or reject the text but can’t amend it. If Parliament approves, the matter returns to the Council of EU for final confirmation.Past experience shows such procedures can face delays. The EU–Canada trade agreement (CETA), negotiated in 2016, still awaits full ratification despite provisional implementation. Similarly, the EU–Mercosur agreement has faced political and legal obstacles.

India’s ratification process is comparatively simpler. Inter-ministerial consultations are conducted under Ministry of External Affairs. Once the concerned ministries submit their assessments, the Cabinet authorises signature of agreement. However, FTA cannot formally enter into force until EU ratification is completed and both sides agree on an implementation date.

Optimistically, the agreement could become operational in early 2027. A more realistic estimate points to mid or late 2027.The most controversial subject—agriculture—was excluded from the agreement by mutual consent, as it’s equally problematic for India. However, it remains unclear whether the agreement might not spark controversy for other reasons.

Strategic Importance Beyond Trade

The FTA is only one pillar of a broader EU–India partnership. Security cooperation and investment agreements are equally important components of this emerging relationship.At Oslo recently Prime Minister Modi stressed next priority should be investment agreement. This demonstrated that both sides increasingly see each other not merely as trading partners, but as strategic actors in a changing global order.

Main Economic Provisions

The agreement contains 20 chapters and numerous annexes dealing with trade in goods, services, customs procedures, intellectual property, labour mobility, and regulatory cooperation.Although detailed tariff schedules haven’t yet been released, EC has stated that tariffs on around 90% of Indian exports to EU will initially be reduced, eventually reaching 99.3% liberalisation. On Indian side, tariffs on 86% of imports from EU will initially fall, eventually expanding to 96.6%.

India has agreed to reduce or eliminate tariffs in several industrial sectors, including: Chemicals, Cosmetics, Plastics, Automotive parts, Textiles and clothing, Ceramics, Machinery, Boats and marine equipment.Tariffs on many products will disappear immediately, while others will be phased out over periods ranging from five to ten years.

The agreement also provides tariff reductions for selected European food exports to India, including olive oil, fruit juices, confectionery, pasta, chocolate, and sheep meat. Certain products not significantly produced in India, such as kiwi fruit and pears, will receive duty-free quotas.

One of the most significant sectors covered by FTA is automobiles. India has historically imposed tariffs of up to 110% on imported European vehicles. Under agreement, tariffs will gradually decline to 10% over five to seven years for a quota of 250,000 vehicles annually.   Equally important is reduction of tariffs on automotive components. This is expected to encourage European manufacturers to expand production within India itself, integrating the country more deeply into global supply chains.

Simplifying Trade Procedures

Beyond tariffs, measures are introduced aimed at reducing bureaucracy and facilitating business operations.Customs procedures will be simplified through among faster clearance for low-risk and perishable goods;reduced documentation, online publication of rules, creation of digital “single window” systems for documentation and certification, establishing category of “Authorised Economic Operators”, granting trusted exporters and importers access to faster and simpler procedures.

Special emphasis is placed on SMEs, which form majority of businesses involved in EU–India trade. Dedicated contact points and simplified rules of origin are intended to help participate more effectively.The simplified certification system is also designed to prevent third-country products, especially Chinese goods, from being falsely labelled as Indian exports.Trade in services will also be liberalised in accordance with WTO principles and previous EU agreements.

However, one major European objective remained unresolved. The EU sought broader access for European firms to participate in Indian government procurement tenders. New Delhi resisted, and the final agreement contains only limited transparency provisions without guaranteeing open tendering or equal treatment standards as sought.

Climate and Carbon Issues

One of the most contentious topics during negotiations concerned EU’s Carbon Border Adjustment Mechanism (CBAM), which entered into force on January 1, 2026 and imposes additional charges on imports produced through carbon-intensive processes, particularly affecting sectors such as steel and heavy manufacturing. India requested exemptions or transitional relief for Indian exporters, but EU rejected, arguing that CBAM is a core element of European climate policy and cannot be weakened for individual partners.It is likely to remain a long-term source of friction between both sides.

Intellectual Property & Labour Mobility

The FTA contains detailed provisions on intellectual property rights, including protections for trademarks, copyrights, industrial designs, and trade secrets. It strengthens judicial and administrative enforcement mechanisms, introduces civil and criminal penalties for violations, and permits confiscation and destruction of counterfeit goods.

Labour mobility, a major Indian priority, also received attention. Although visa policy remains under authority of individual EU member states, negotiators introduced several facilitative measures connected to trade in services. These include: Easier short-term business visas; Faster visa processing; Quicker notification procedures; Simplified movement for intra-corporate transferees.

Geopolitical Implications

The broader significance of FTA extends well beyond trade. The EU and India increasingly share concerns regarding global supply chains, strategic autonomy, technological competition, and need to diversify international partnerships.Although differences remain, especially regarding relations with Russia, these disagreements are not currently preventing closer cooperation.

In Europe, public discussion of FTA remains limited, though controversy could emerge once specific industries identify sectors vulnerable to competition. In India, however, exporters and business groups are showing strong interest in possible opportunities.

The intended objective is clear: to deepen economic interdependence and strategic cooperation between two major democratic actors navigating an increasingly fragmented international system. If FTA, defence cooperation framework, and investment agreement are all successfully implemented, EU–India relationship could evolve into one of the most  important strategic partnerships in the emerging multipolar world.— INFA