India–EU Trade Deal: Tariffs Set To Be Cut On Over 90% Goods, Wine And Chocolate On Zero-Duty List

India–EU Trade Deal Announcement: The European Union on Tuesday said that over 90% of its goods exports to India will receive duty reductions under the landmark India–EU trade agreement, a step expected to save EU member nations up to 4 billion euros in duties on European products.

Prime Minister Narendra Modi confirmed that India and the European Union have concluded the long-pending trade pact, describing it as a major milestone in bilateral economic relations.

As per an EU fact sheet, the agreement is expected to double EU exports to India. It will also widen access to India’s services market, particularly in financial and maritime services, opening new business avenues and supporting job creation.

Also See: India EU Trade Deal Live Updates

Which products will become cheaper?

Under the pact, a wide range of European imports into India will attract zero tariffs. These include machinery and electrical equipment, aircraft and spacecraft, optical, medical and surgical instruments, plastics, 22% of pearls, precious stones and metals, chemicals, motor vehicles, iron and steel, and pharmaceuticals.

Import duties on cars will be reduced in phases from as high as 110% to as low as 10%. Tariffs on wine will also be brought down gradually from 150% to 20% at the lower end.

Currently, processed foods such as pasta, bread, biscuits and chocolate face duties of about 50%, which will be fully removed under the deal. Tariffs on olive oil, margarine and other vegetable oils — now at 45% — will also be eliminated. Fruit juices and non-alcoholic beer will attract zero duty as well.

Tariff relief under the agreement is expected to go beyond consumer goods. Negotiations have reportedly included phased reductions in duties on European automobiles, with India offering significant cuts over time. However, sensitive sectors such as agriculture and dairy are largely being protected to safeguard domestic interests. Services and regulatory cooperation are also key parts of the pact, aimed at ensuring better access for Indian IT, professional services and skilled workers to European markets.

For Indian companies, lower duties on European machinery, high-end components and chemicals could help reduce production costs and improve competitiveness. Meanwhile, European firms gain stronger access to India’s fast-growing market, particularly for premium products. Although major hurdles have been cleared, some issues related to regulatory norms and non-tariff barriers are still being fine-tuned ahead of full implementation.

Also See: 10 Things To Know About India-EU Free Trade Deal

‘Mother of all trades’

Calling it the “mother of all trades”, Prime Minister Modi hailed the India–EU FTA during his meeting with European Commission President Ursula von der Leyen and European Council President Antonio Costa at Hyderabad House in New Delhi.

“This deal will bring many opportunities for India’s 1.4 billion people and many millions of people in the EU,” PM Modi said, adding that the agreement “represents about 25% of global GDP, and one-third of global trade”.

Describing the agreement as historic, von der Leyen said, “We have created a free trade zone of two billion people, with both sides set to benefit.”

Europe and India are making history today.

We have concluded the mother of all deals.

We have created a free trade zone of two billion people, with both sides set to benefit.

This is only the beginning.

We will grow our strategic relationship to be even stronger. pic.twitter.com/C7L1kQQEtr

— Ursula von der Leyen (@vonderleyen) January 27, 2026

PM Modi noted that the EU–India trade deal will give a boost to key Indian sectors such as textiles, gems and jewellery, leather goods, along with the services sector.

The pact is expected to be formally signed after legal vetting, a process likely to take around six months. It will also require ratification by the European Parliament.