Gyanendra Tripathi, Partner & Leader – Indirect Tax : North & West, Tax & Regulatory Advisory, BDO India

“Under the FTA, the EU will eliminate tariffs on over 90% of tariff lines, and 91% in terms of value on exports made from India, while India would eliminate tariffs on 86% of tariff lines, and 93% in terms of value of exports from EU. Moreover, both sides will partially liberalise a significant additional number of tariff lines, thereby bringing the overall coverage of trade liberalisation to 96.6% for India and 99.3% for the EU.”

The key sectors to benefit in India from customs duty elimination would be textiles, pharmaceuticals, footwear, chemicals, fisheries, gems and jewellery etc., whereas exporters from the EU would benefit from reduced import duties on machinery, medical devices, avionics, automotive and chemicals. This would make exports from these sectors more competitive in their respective jurisdictions.

For India, enhanced affordability of machinery due to reduced customs duties would encourage technological upgradation of manufacturing facilities, improving productivity. Further, duty removal for labour-intensive sectors such as textiles, gems and jewellery, and leather would boost exports. Reduction in import duties on automobiles (under tariff quotas) could also stimulate demand and potentially lead to local manufacturing. In many cases, India’s staggered duty reductions provide adequate time for domestic industries to adapt. Overall, enhanced trade between two of the world’s largest economies will significantly accelerate economic activity and growth.”

Karthik Mani, Partner & Leader – Indirect Tax : South, Tax & Regulatory Advisory, BDO India

“The FTA secures strong commitments from the EU across key sectors, including IT and IT-enabled services, creating significant opportunities for Indian technology companies to expand their export footprint.”

Provisions related to the movement of independent professionals in areas such as R&D, education services, and computer and computer-related services will enable Indian specialists to access a wider range of clients across EU member states. This is expected to enhance cross-border service delivery, deepen professional engagement, and strengthen India’s presence in high-value knowledge sectors within the EU market.”

Munjal Almoula, Managing Partner – Tax & Regulatory Advisory, BDO India

“After nearly two decades of negotiations, India and the EU finalised the landmark Free Trade Agreement on January 26, 2026, hailed by many as the ‘mother of all deals.’ Designed as a ‘living agreement’ with provisions for digital trade, AI and semiconductor collaboration, and CBAM offsets via India’s CCTS linkage, it eliminates tariffs on over 96% of EU goods across 27 nations representing 25% of global GDP.”

Textiles, gems and jewellery, leather, pharmaceuticals, and high-tech engineering are expected to see strong growth, with bilateral trade projected to double to $136 billion by 2032 amid ongoing global trade realignments. The agreement also eases professional mo