Authored by Novus Insights
12/02/2026
India and the European Union concluded a landmark free trade agreement on January 27, 2026, that many policymakers and economists are already calling the “mother of all deals.” The scale alone explains the attention. Together, India and the EU represent nearly two billion people and close to a quarter of global GDP, creating the world’s largest free trade zone by economic weight.
Announced after years of complex negotiations, the agreement reflects a broader shift in how major economies approach global trade. Speaking at Davos, the President of the European Commission, Ursula von der Leyen, described the pact as part of a strategy for a “new Europe,” one that actively partners with the growth centers of the 21st century. Indian Prime Minister Narendra Modi echoed this sentiment, calling the agreement a foundation for long-term prosperity and a deeper economic partnership. For businesses, however, the real question is not the symbolism but how this agreement reshapes market access, competition, and growth strategy across industries. In this article, we examine what the India–EU Free Trade Agreement entails, the industries it is expected to benefit, and how businesses can use research to shape informed growth strategies.
India, the fourth largest economy in the world, and the EU, the second largest, are economic powerhouses with very different strengths: India is a rapidly growing economy with expanding manufacturing and services sectors, while the EU is a mature, high-value market with well-established regulatory frameworks and strong purchasing power. As per a World Economic Forum report, the two already trade roughly €180 billion in goods and services annually, making the EU one of India’s most important partners. The report states that the EU accounts for over 11% of India’s total trade in 2024, illustrating its strategic importance for Indian exporters, while India represents a smaller but fast-growing share of EU trade. This complementary dynamic, scale, and growth potential from India with premium demand and advanced industries in the EU, is a core reason the trade deal is seen as transformative. Rather than competing, the two blocs now have a platform to integrate manufacturing, services, and innovation at scale.
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The India–EU Free Trade Agreement is designed to reduce trade friction and establish a contemporary, rules-based framework for economic cooperation. By linking two economies whose combined market size is valued at roughly INR 2091.6 lakh crore (USD 24 trillion), the agreement opens up a scale of commercial opportunity rarely seen in bilateral trade partnerships. As part of the arrangement, India will phase out or lower duties on 96.6 percent of EU exports by value, while the European Union will ease tariffs on 99.5 percent of Indian goods, creating significantly wider access for businesses on both sides.
India has secured preferential access to European markets across 97 percent of tariff lines, covering 99.5 percent of export value, with immediate or phased duty elimination for key labour-intensive sectors such as textiles, leather, footwear, marine products, gems, and jewellery, significantly improving competitiveness.
In return, India will liberalise over 92 percent of its tariff lines for EU exports, enabling greater inflow of high-technology goods, lowering input costs, and supporting deeper integration into global and European value chains.
The European Commission estimates annual duty savings of $4.7 billion, with exports potentially doubling by 2032 once the deal is fully implemented.
Beyond goods, the agreement spans services, investment protection, digital trade, intellectual property, and sustainability standards. Negotiations that began in 2007 stalled for nearly a decade over issues such as data protection and labor mobility, before resuming in 2022 amid shifting geopolitical and economic priorities.
The real impact of the agreement lies in how it reshapes business economics across regions and sectors.
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Despite its scale, the India–EU trade deal does not guarantee success for all participants. Trade agreements create opportunity, but they do not eliminate complexity.
Businesses without regulatory readiness may struggle to meet EU compliance expectations. Others may underestimate the importance of local market understanding, assuming tariff reductions alone will drive demand. Smaller firms, in particular, may need phased entry strategies, partnerships, or targeted go-to-market planning to compete effectively.
This reality makes preparation critical. Early movers who invest in insight, market sizing, and competitive intelligence are far more likely to convert access into advantage.
The agreement, when ratified, is expected to unlock value across a wide range of sectors. Let’s look at some of the numbers mentioned in the factsheet by the Ministry of Commerce and Industry, Government of India:
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Trade agreements are not isolated policy events. They act as long-term signals that influence pricing structures, sourcing decisions, competitive entry, and investment flows.
Companies that actively track such developments are better positioned to anticipate demand shifts, reassess supply chain risk, and identify white spaces before competitors do. Those that ignore them risk strategic blind spots that only become visible after market dynamics have already shifted.
Trade agreements create access, but access alone does not drive growth. To translate a free trade agreement into measurable business outcomes, companies must move beyond awareness and apply structured analysis that connects policy shifts to market realities, competitive behavior, and execution strategy. Key strategic actions for businesses include:
This strategic translation ensures that trade agreements influence not just where businesses operate, but how they compete and grow over time.
In a post-FTA environment, market research shifts from a supporting role to a strategic decision engine. A top market research and market intelligence company enables businesses to convert macro-level trade developments into clear, data-backed growth strategies across markets and industries. How market research creates a decision advantage:
For organizations operating across borders, this combination of strategic insight, speed, and contextual depth enables confident decision-making and reduces uncertainty as trade landscapes evolve.
As a leading business research firm with a global footprint, Novus Insights works with organizations navigating complex, multi-market environments shaped by policy, regulation, and competition. By combining deep domain expertise with tech-enabled research frameworks, Novus Insights delivers actionable market intelligence aligned with international standards.
From market sizing and competitive intelligence to go-to-market strategy and branding research, Novus Insights supports decision-makers across industries such as IT and telecom, healthcare, FMCG, and industrial manufacturing. Global, multi-country studies and access to hard-to-reach B2B stakeholders enable clients to move confidently from insight to execution. For businesses assessing how the India–EU trade deal impacts growth, sourcing, or expansion strategy, informed decisions begin with the right intelligence. To learn more about our market research services, call us today at +91 124-436-6686, +91 7428 225 350, or via email at contactus@novusinsights.com. You may also fill out our contact form, and our representatives will reach out to you at the earliest.
Q.1 How Soon Will Businesses See the Impact of the India–Eu Trade Deal?
Some tariff reductions and market access benefits will begin once the agreement is ratified and comes into force. However, the full impact will unfold over several years as regulatory alignment, phased tariff elimination, and investment flows progress. Businesses that plan early, supported by market intelligence and scenario analysis, are better positioned to capture first-mover advantage.
Q.2 Which Sectors Need the Most Regulatory Preparation?
Manufacturing, healthcare, chemicals, agri-exports, and medical devices face the highest compliance and certification requirements in the EU. Early regulatory assessment, supported by structured business research, helps companies anticipate costs, timelines, and operational adjustments rather than reacting after market entry.
Q.3 Will SMEs Benefit from the India–EU Trade Agreement?
Yes, especially SMEs in labor-intensive and export-oriented sectors such as textiles, leather, food processing, and engineering goods. However, SMEs benefit most when they combine tariff advantages with targeted market research, competitive intelligence, and phased go-to-market strategies that reduce risk and capital exposure.
Q.4 How does the Trade Deal Affect Pricing Strategies in EU Markets?
Lower tariffs can improve margins or create room for competitive pricing, but pricing decisions cannot rely on cost savings alone. Market intelligence is critical to understand local competition, customer expectations, and value perception across different EU countries, ensuring pricing remains both competitive and sustainable.
Q.5 Why is Market Research Important for Indian and EU Businesses Planning Expansion under the Trade Deal?
The trade agreement opens access to diverse and highly segmented markets across both India and the EU. Consumer preferences, regulatory requirements, and competitive dynamics vary significantly across regions and countries on each side. Market research enables businesses to size opportunities accurately, assess market-entry risks, and develop go-to-market strategies grounded in local market realities rather than broad assumptions.
Q.6 What Role does Competitive Intelligence Play After the FTA?
As trade barriers fall, new players enter the market and incumbents adjust their strategies. Competitive intelligence enables businesses to track competitor movements, identify emerging white spaces, and avoid late-entry disadvantages. It supports informed decision-making in fast-evolving, post-FTA market conditions.
Q.7 How can Novus Insights Support Cross-Border Expansion Under the India–EU Trade Deal?
As a global market intelligence company and business research firm, Novus Insights supports organizations through integrated market sizing, competitive intelligence, go-to-market research, and rapid research support. By combining tech-driven research with deep domain expertise, Novus Insights helps businesses translate trade policy shifts into confident, data-backed growth strategies.