Link Securities | According to Reuters, India and the European Union (EU) announced yesterday that they have reached a trade agreement that will drastically reduce tariffs on most products, with the aim of boosting bilateral trade. The agreement is expected to double EU exports to India by 2032, eliminating or reducing tariffs on 96.6% of the value of traded goods, which will save European companies €4 billion in tariffs, according to data provided by the EU.
In addition, the EU will reduce tariffs on 99.5% of products imported from India over seven years, and tariffs will be reduced to zero for Indian maritime, leather and textile products, chemicals, rubber, base metals, gems and jewellery, according to a statement from the Indian Ministry of Commerce.
India and the EU indicated that agriculture-related products such as soybeans, beef, sugar, rice and dairy products have been kept out of the scope of the trade agreement.
According to Reuters, trade between India and the EU amounted to $136.5 billion in the fiscal year ending in March 2025, compared to $132 billion between India and the US and $128 billion between India and China.
The formal signing of the agreement between India and the EU would take place after a legal verification process that is expected to last between five and six months, according to an Indian government official familiar with the matter. In this regard, theofficial said they expect the agreement to be implemented within a year.
For its part, the verification process in the EU could suffer some setbacks, as in the case of Mercosur. In this regard, it should be remembered that the EU Parliament has voted in favour of challenging the agreement between the EU and Mercosur before the EU Court of Justice.
