India and the European Union concluded negotiations for a historic free trade agreement on January 27, 2026, at the 16th India-EU Summit in New Delhi. Here is what it is and why it matters.

Talks first began in 2007 but stalled in 2013 over market access. They were formally relaunched in June 2022. The EU is India’s largest trading partner in goods, with bilateral merchandise trade at $136.53 billion in 2024-25. The EU takes about 17 per cent of India’s total exports.

Together they form a market of nearly two billion people, close to a quarter of global GDP. Over 99 per cent of Indian exports by trade value will get preferential or duty-free EU access.

Indian exporters of garments, pharmaceuticals, steel, tea, coffee and spices stand to gain, while India will open its market for EU wine, spirits and olive oil.

Sensitive farm products were kept out. India shielded dairy, cereals and poultry, while the EU protected beef, sugar and rice. The EU’s carbon border tax was also kept out of the deal.

A mobility framework in the deal eases entry for Indian professionals, employees and students in the EU.