"India-EU Trade Deal Message Against Tariffs": European Council President

India and the European Union (EU) have concluded negotiations for a proposed free trade agreement aimed at boosting two-way trade and strengthening economic ties between two of the world's largest economies. Both sides have described the deal-- which is likely to be announced today -- as balanced and forward-looking. 

According to European Council President Antonio Costa, the pact sends a significant political message against rising tariffs and protectionism amid global uncertainties triggered by US President Donald Trump's policies.

India-EU Pact "Message Against Rising Tariffs"

"In our multipolar world, it's essential that the EU and India become closer and closer partners because we can together be strong providers of stability, protectability and reliability in international relations and protect our international rules-based order," Costa, who was the chief guest at the Republic Day celebrations along with European Commission President Ursula von der Leyen, said while talking to Hindustan Times. 

The European Union is India's largest trading partner, and the free trade deal, dubbed as the "mother of all trade deals" by the EU chief herself, is expected to expand bilateral trade and investment, particularly in sectors affected by Trump tariffs.

"Our trade agreement, I think, is a very important geopolitical stabiliser and a showcase of how it's possible to protect international rules-based trade," Costa added.

The European Council President said the India-EU deal will send an "important political message to the world that India and the EU believe more in trade agreements than in tariffs" at a time when protectionism is rising and "some countries have decided to increase tariffs."

India-EU Trade

India's bilateral trade in goods with the EU was USD 136.53 billion in 2024-25 (exports worth USD 75.85 billion and imports worth USD 60.68 billion), making the EU India's largest goods trading partner. The services trade in 2024 was USD 83.10 billion. 

The EU's tariffs on Indian goods are about 3.8 per cent, but labour-intensive sectors attract about 10 per cent import duty. India's weighted average duty on EU goods is about 9.3 per cent, with particularly high duties on automobiles, parts (35.5 per cent), plastics (10.4 per cent), and chemicals and pharmaceuticals (9.9 per cent).

When the free trade agreement (FTA) is signed later this year, it is likely to provide duty-free trade of several goods from labour-intensive sectors such as textiles, chemicals, gems and jewellery, electrical machinery, leather and footwear.

Trump Tariff

The global economy is navigating renewed turbulence amid Trump's aggressive tariff postures, which have unsettled markets and disrupted global supply. Against this backdrop, an India-EU FTA is seen as a strong signal in favour of open, predictable and diversified trade.