This week, India and the European Union struck a long-awaited trade deal, touted by its proponents as “the mother of all deals” after almost two decades of development.
The Free Trade Agreement (FTA) signed this week during European Commission President, Ursula von der Leyen’s state visit to India will “strengthen trade, investment and political ties between the world’s two largest democracies,” the European Commission said.
There’s been much commentary about the expansive agreement online and in print, with both parties emphasising the aspects they feel to be most to their advantage.
So what’s actually included in the agreement, and who’s likely to benefit from it?
The FTA comes as part of a broader strategy, titled Towards 2030: A Joint European Union-India Comprehensive Strategic Agenda, that aims to deepen and expand partnership between the bloc and the southeast Asian nation.
It covers specific areas, such as “prosperity and sustainability”; “technology and innovation”; “security and defence”; and “connectivity and global issues”.
“Building on more than 20 years of strategic partnership, it is a forward-looking action plan that reflects the commitment of both sides to work together in an increasingly complex geopolitical environment as trusted, predictable and like-minded partners,” the European Commission’s statement on the strategic agenda said.
The development was hailed by many as a key step in a broader strategy of reducing economic reliance on the United States, which is increasingly viewed in Europe as an unreliable partner.
The EU-India FTA comes under the strategic agenda’s “prosperity and sustainability” umbrella, and requires ratification by EU member states, as well as the European Parliament and Indian cabinet.
Despite being the world’s most populous country and the fifth largest economy, European exports to India have historically been very low compared to exports to other markets, a fact attributable to high tariffs on European goods.
The FTA would see, according to the European Commission, 90 percent of tariffs between the trading partners removed or reduced, leading to an estimated doubling in EU annual goods exports to India by 2032 (or a 107 percent increase).
The reduction in tariffs would additionally lead to an estimated €4 billion in savings per year on duties for European exporters, the Commission has claimed.
Similarly, the EU will cut tariffs on most Indian goods over the course of the next seven years, eliminating them altogether on a number of key Indian exports such as jewellery, textiles and chemicals.
In terms of Irish economic interest, whiskey manufacturers are expected to be a primary beneficiary.
Currently, exports of Irish whiskey to India are subject to tariffs of 150 percent, which as a result of the agreement is expected to fall to 40 percent over a phased period.
Commenting on that particular aspect of the agreement, Minister for Agriculture, Food and the Marine, Martin Heydon said that it “is a positive one for the Irish agri-food sector”.
“It provides significant opportunities for our spirit drinks exports – particularly for Irish whiskey in what is both the world’s largest whiskey market and the fastest growing market for our whiskey exports,” Minister Heydon said.
According to the Department, in 2024, Irish agri-food exports to India totalled €40.5 million, a figure primarily made up of exports of whiskey (€30.3 million in 2024), with additional exports under animal feed (€2.4 million) and dairy (€2.2 million).
However, “sensitive sectors” in the agri-food industry have been excluded from the deal, the European Union opting to maintain its tariffs on such products as beef, sugar, rice, chicken meat, milk powders, honey, bananas, soft wheat, garlic, and ethanol.
Similarly, only limited imports of products such as sheep and goat meat, sweetcorn, grapes, cucumbers, dried onions, rum made of molasses, and starches are to be allowed.
The Commission noted that a bilateral safeguard mechanism will enable action to be taken should difficulties arise as a result of imports.
One of the big winners from the deal is expected to be European carmakers, with India agreeing to cut tariffs on cars down to 10 percent, from highs of 110 percent.
Upon news of the announcement, one of India’s leading car manufacturers, Mahindra and Mahindra, saw stocks slide as much as five percent, a slump experienced to a lesser degree by other carmakers such as Maruti Suzuki India (three percent).
The agenda, and the agreement, go beyond areas such as trade however, including commitments to climate measures and labour rights.
An aspect of the deal highlighted by Indian politicians in particular is the comprehensive framework on co-operation on mobility, the first mobility-related agreement at the EU level.
It focuses on “streamlining” access to European jobs and academic institutions in particular, with the EU committing to simplifying processes and pathways enabling students and professionals, especially in the IT industry, to study and work in EU countries.
The EU and India will also seek to recognise qualifications and learning periods abroad in an effort to make collaboration and integration across countries smoother and faster.
As part of the mobility measures, the European Union has also committed to launching the first pilot ‘European Legal Gateway Office’ in India as a “one-stop hub to provide information and support the movement of workers to the EU, starting with the ICT sector”.
However, the pact does not provide for free movement between the EU and India, or grant access to EU-wide residency, those competencies remaining with member states. It is understood that national immigration processes will still apply.
Both parties additionally agreed to promote “mutual understanding” and work together to shape “effective global governance”, through measures like coordinating at multilateral fora such as the United Nations and G20 and strengthening international institutions like the World Trade Organisation.
Security enhancement across the EU and India was included in the talks, with agreement reached to cooperate on counter terrorism activity and “enhance exchanges on hybrid threats” and share best practices in developing strategies and policies to counter these threats.
India and the EU agreed to strengthen law enforcement cooperation through the implementation of the Working Arrangement between the Indian Central Bureau of Investigation (CBI) and Europol, including both India’s connection to Europol’s Secure Information Exchange Network Application (SIENA) and the deployment of an Indian liaison officer at Europol’s HQ.