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The agreement was announced on Tuesday, January 27, following high-level talks between India and the EU, along with the signing of an agreement. Comprehensive Strategic and Security Partnership. The FTA is expected to be operational by 2027 and aims to deepen economic ties between the two major economies.
Reacting to the development, the Confederation of Indian Industry (CII) said the agreement marks a strategic breakthrough in India’s global trade engagement.
“CII commends the India-EU Free Trade Agreement announced today. This historic agreement represents a strategic breakthrough in India’s global trade engagement and significantly deepens the partnership between two major democracies and economies that together account for approximately 25% of global GDP,” CII Director General Chandrajit Banerjee said in a statement.
Highlighting the scale of market access secured under the deal, Banerjee said, “The unprecedented preferential access secured for over 99% of Indian exports is a game-changer for Indian industry. It decisively improves competitiveness in the EU high-value market, connects Indian manufacturers and service providers deeper into global value chains, and accelerates investment, technology flows and scale.”
According to CII, the key sectors to gain include textiles and apparel, leather and footwear, gems and jewellery, marine products, engineering goods, automobiles, agro and processed foods, IT and IT-enabled services, and other business and professional services.
Emphasizing the employment impact, Banerjee said the agreement provides “tangible benefits for labour-intensive sectors and MSMEs” and, with its mobility provisions, “lays the foundation for sustained, inclusive and globally competitive growth that fully aligns with India’s vision of Developing India @2047.”
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Federation of Indian Chambers of Commerce and Industry (FICCI) also welcomed the agreement, calling it an agreement of long-term strategic importance.
FICCI President Anant Goenka said, “Congratulations to the Government of India under the leadership of Honorable Prime Minister Shri Narendra Modi for pursuing this agreement of strategic scale and long-term importance.”
Goenka said the EU represents the largest and most high-potential market covered under India’s recent free trade agreements. He said the FTA is expected to unlock substantial untapped trade and investment opportunities by enabling deeper market access, stronger value-chain integration and enhanced export competitiveness in manufacturing and high-value sectors.
Adding a corporate perspective from the automotive sector, Mercedes-Benz India Managing Director and CEO Santosh Iyer told PTI, “The India-EU FTA is a historic achievement for India and reiterates the growing relevance of the Indian economy globally.”
He said the agreement is “expected to strongly promote technological innovation and sustainable growth within the Indian automotive sector, with a special focus on future mobility.”
However, Iyer cautioned, “The final implications of the FTA can be determined only when the fine print of the agreement is available to us.”
Reiterating Mercedes-Benz’s support for trade liberalisation, Iyer said, “With the India-EU FTA, India’s economic growth should get a strong boost as borders will open, opening up opportunities in new markets, boosting bilateral trade and creating job opportunities.”