Lok Sabha Question No. 2770 (UNSTARRED), answered on 2026-03-10
Subject: India-EU FTA
Ministry: COMMERCE AND INDUSTRY
Asked by: Shri Anto Antony

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE AND INDUSTRY DEPARTMENT OF COMMERCE

## LOK SABHA UNSTARRED QUESTION NO. 2770 ANSWERED ON 10/03/2026

## INDIA-EU FTA

## 2770. SHRI ANTO ANTONY:

Will  the  Minister  of COMMERCE AND INDUSTRY ( वाणिज्य एवं उद्योग मंत्री ) be pleased to state:

- (a) the major changes or commitments proposed under the India-EU FTA, sector-wise;
- (b) whether  the  Government  has  conducted  any  impact  or  risk  assessment  to  identify sectors that may be adversely affected by the implementation of the India-EU FTA, and if so, the details thereof;
- (c) whether  any  mitigation  measures  are  proposed  for  domestic  sectors  likely  to  face adverse impact, and if so, the details thereof; and
- (d) the expected benefits for India in terms of trade, investment, employment and market access arising from the India-EU FTA?

## ANSWER

## वाणिज्य एवं उद्योग मंत्रालय में राज्यमंत्री ( श्री जिजिन प्रसाद ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (SHRI JITIN PRASADA)

(a)  India and the European Union (EU) announced the conclusion of negotiations for a Free Trade Agreement  (FTA)  on  27th  January  2026  at  the  16th  India-EU  Summit  held  in  New  Delhi.  The Agreement provides for comprehensive market access and modern trade disciplines across goods and services. India has secured preferential market access across 97% of EU tariff lines, covering 99.5%  of  India's  exports  by  trade  value.  Of  this,  70.4%  of  tariff  lines,  accounting  for  90.7%  of India's exports, will enter the EU market at zero duty from the date of entry into force of the FTA, particularly benefiting key labour-intensive sectors such as textiles and apparel, marine products, leather and footwear, chemicals, plastics and rubber, sports goods, toys, and gems and jewellery. A further 20.3% of tariff lines, covering 2.9% of India's exports, will witness duty elimination over a period  of  3-5  years,  while  6.1%  of  tariff  lines,  covering  6%  of  exports,  will  receive  preferential access through tariff reductions or Tariff Rate Quotas (TRQs). On the other hand, India has offered duty concessions on 92.1% of its tariff lines, covering 97.5% of EU exports to India, with immediate elimination on 49.6% of tariff lines and phased reductions over 5-10 years on a substantial portion thereof, while maintaining calibrated treatment for sensitive sectors in line with domestic priorities.

(b)  The assessment of impact of Free Trade Agreements (FTAs) is a continuous process. A Joint Study Group (JSG) is normally set up to study the feasibility of the proposed FTAs, including their impact on the domestic industry, especially small and medium enterprises. Stakeholders including industry  representatives,  Apex  Chambers  of  Commerce  and  Industry,  Industry  Associations  as well as the Administrative Ministries and Departments are consulted from time to time. The FTA Monitoring Committee under the Department of Commerce (DoC) oversees the impact of FTAs

through  regular  industry  feedback  on  employment  and  industrial  growth.  This  helps  address import-related  issues  such  as  rule  violations  and  unfair  trade  practices,  as  well  as  export challenges like FTA underutilization and non-trade barriers. Additionally, the DoC conducts FTA assessment studies as needed for review and to guide future negotiations.

- (c)  The Agreement provides in-built mitigation measures to address potential adverse impact on domestic  sectors.  Sensitive  sectors  such  as  dairy,  cereals,  poultry,  soymeal,  certain  fruits  and vegetables,  etc.,  have  been  appropriately  safeguarded,  balancing  export  opportunities  with domestic priorities. The tariff liberalisation schedule has been calibrated, with phased elimination extending  up  to  10  years  for  identified  products  and  the  use  of  Tariff  Rate  Quotas  (TRQs)  for select  items.  Further,  Product  Specific  Rules  (PSRs)  have  been  agreed  to  ensure  adequate domestic value addition while providing necessary flexibility aligned with existing supply chains.The  Agreement  also  provides  for  trade  remedies  in  form  of  bilateral  safeguards  in  case surge in imports due to tariff liberalization causes or threatens to cause injury to domestic industry.
- (d)  India has secured unprecedented market access for more than 99% of Indian exports by trade value to the EU. Of this 90.7% of India's exports will enter zero duty into the EU market from entry into  force  of  the  FTA.  More  specifically,  exports  worth  more  than  USD  33  billion  in  key  labourintensive sectors (such as textiles, apparel, marine, leather, footwear, chemicals, plastics/rubber, sports goods, toys, gems, and jewellery) that are currently subjected to import duty between 4% to 26% in the EU and are crucial for employment generation, will enter zero duty from entry into force of the FTA and thus gain enhanced competitiveness in the EU market. These sectors are poised to benefit  from  tariff  liberalisation  and  enhanced  competitiveness,  enabling  deeper  integration  into global and European value chains and simultaneously creating job opportunities. Under the FTA, broader  and  deeper  commitments  have  been  secured  from  the  EU  across  144  services subsectors, including IT/ITeS, professional services, education, and other business services. This covers a vast range of services sectors spectrum in which Indian service providers will get a stable and  business  friendly  regime  in  the  EU  market  to  supply  their  services.  India's  competitive, knowledge intensive services are expected to drive India's exports while benefitting EU businesses and  consumers.  The  FTA  establishes  an  assured  regime  for  temporary  entry  and  stay  for professionals, including Business  Visitors, Intra-Corporate  Transferees, Contractual  Service Suppliers,  and  Independent  Professionals.  Through  a  comprehensive  mobility  framework,  India strengthens its position as a global hub for talent. The framework eases movement of employees (and  their  spouses  and  dependents)  of  Indian  Corporates  established  in  the  EU  in  all  services sectors. For business entities aiming to provide services under a contract to EU clients, India can access 37 sub-sectors including IT, business, and professional services. Independent professionals  intending  to  provide  services  to  EU  clients  get  certainty  in  17  subsectors  for Independent Professionals, covering IT, R&D, and higher education, creating expanded opportunities  for  Indian  professionals  and  knowledge-driven  trade.  Commitments  by  EU  for digitally  delivered  services  will  provide  a  significant boost  to  expanding  India's  Global Capability Centres  (GCCs)  footprint  and  expand  its  dominant  digitally  delivered  services.  The  agreement creates predictable regimes for trade and investment, encouraging EU investments into India in high-technology areas fostering innovation and deeper integration of Indian enterprises, including MSMEs,  into  European  value  chains.  Enhanced  market  access  under  the  FTA  is  expected  to strengthen  export  competitiveness  in  labour-intensive  sectors  and  MSMEs.  As  these  sectors employ  a  large  workforce,  including  women  and  rural  workers,  increased  trade  and  investment flows  are  likely  to  generate  substantial  direct  and  indirect  employment  across  the  value  chain, supporting inclusive and sustainable growth.

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