India-EU trade deal: The European Union and India have reached a significant trade agreement to grant each other Most Favoured Nation (MFN) status for five years, according to a draft of the agreement released on February 27, 2026. This development marks a pivotal moment in the economic relations between the two entities, aiming to enhance bilateral trade and investment.
The Free Trade Agreement (FTA), concluded after extensive negotiations that resumed in 2022, is set to eliminate or reduce tariffs on 96.6% of EU exports to India by value and 99.5% of Indian exports to the EU by trade value. This comprehensive tariff reduction is anticipated to bolster trade flows and economic cooperation significantly.
Historically, the India-EU trade talks have faced numerous challenges, but the current agreement represents a strategic turning point. The MFN status ensures non-discriminatory trade practices, fostering a more predictable and stable trade environment. The agreement is expected to stimulate economic growth and create new opportunities for businesses on both sides.
Looking ahead, the implementation of this trade deal is likely to influence future negotiations and set a precedent for other international trade agreements. As both parties prepare to ratify the agreement, the global market will be closely watching the economic impacts and potential shifts in trade dynamics.
Published in SouthAsianDesk, February 28th, 2026
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