Bilateral trade in goods and services reached approximately SEK 77.3 billion in 2025, more than double the level in 2019, while Swedish investments in India exceeded USD 1 billion in 2025 alone. Around 300 Swedish companies are established in India, supporting approximately 220,000 direct and 2 million indirect jobs across the country.
The FTA will reduce or eliminate tariffs on 96.6% of EU goods export value to India. The agreement is estimated to have the potential to increase EU exports to India by 54%, equivalent to approximately €58 billion, once fully implemented in 2037.
Furthermore, the agreement grants EU companies privileged access to selected Indian services sectors, including financial services and maritime transport.
For Swedish companies, the opportunity is significant for a broad range of sectors such as machinery, automotive products, chemicals, pharmaceuticals, iron and steel, paper products, plastics, services and industrial technology.
FAQ
What is the EU–India Free Trade Agreement?
The EU–India FTA is a comprehensive trade agreement designed to reduce barriers to goods, services, digital trade and investment-related activity between the EU and India.
When fully implemented, India will eliminate tariffs on 86% of tariff lines, representing 93% of current trade value, and partially liberalise additional products. Altogether, 96.6% of EU goods export value to India will be covered by tariff elimination or reduction. The EU will liberalise 99.3% of trade value in the other direction.
When will the FTA enter into force?
Although negotiations concluded on 27 January 2026, the agreement is not yet in force. Before implementation, the text must undergo legal review, translation into all official EU languages, approval by the Council of the European Union, consent by the European Parliament and completion of India's domestic ratification procedures.
Entry into force is expected during the first half of 2027. However, companies should monitor developments closely, as timelines can be affected by the pace of ratification and implementation procedures on both sides.
Why is the agreement commercially important?
India has a population of approximately 1.45 billion and a GDP of around €3.6 trillion. India represented 18% of the global population in 2024 and recorded GDP growth of 6.8% in 2025.
The commercial relationship however remains below its potential: The European Commission’s has estimated that once the agreement is fully implemented in 2037:
- EU exports to India could rise by €57.8 billion (54.2%) and its GDP could be €27 billion higher.
- Indian exports to the EU could rise by €24.1 billion (16.7%) and its GDP could be €44 billion higher.
How much could Swedish exporters save in tariffs, and will the tariffs disappear immediately?
At EU level, the European Commission estimates potential annual duty savings of up to €4 billion once the agreement is fully implemented.
Based on Sweden’s 2025 goods exports to India, the FTA could reduce annual tariff costs by approximately USD 165 million once the tariff commitments are fully phased in.
Some tariffs will be eliminated at entry into force, while others will be reduced over periods of five, seven, eight, ten or, for a limited number of products, up to fifteen years. Some sensitive products will receive tariff reductions or tariff-rate quotas rather than complete elimination.
Approximately USD 62 million, or 38% of the eventual direct annual savings, could be realised at entry into force. Most remaining savings would be phased in over the following eight years, and smaller additional reductions continue thereafter for selected products.
What are rules of origin, and why do they matter?
Preferential tariffs are not automatic. Products must satisfy the agreement’s product-specific rules of origin to qualify.
The rules determine whether a product has been sufficiently produced or processed in the EU or India. Products that do not qualify will continue to face India’s standard tariff, even when the exporting company is established in Sweden.
The agreement introduces self-certification. In the EU, exporters or producers will make out a statement on origin and upload it to a portal where customs authorities can verify it. Origin verification can involve communication with the importer followed, where necessary, by cooperation between EU and Indian customs authorities.
What does the agreement mean for SMEs?
The FTA includes a dedicated SME framework. It requires both parties to publish practical information on doing business through publicly accessible digital platforms and establishes SME contact points to identify ways for smaller companies to use the agreement.
Furthermore, SMEs are expected to disproportionately benefit from lower tariffs, more accessible regulatory information, simplified customs procedures, greater transparency, more predictable rules, improved information on market entry and establishment.
Will the FTA remove Quality Control Orders and product-certification requirements?
No. Indian Quality Control Orders and applicable certification requirements will continue to apply.
The FTA nevertheless introduces measures intended to improve regulatory transparency and predictability. Furthermore, a dedicated Working Group on Conformity Assessment will be established with the purpose of simplifying and addressing challenges around product testing, certification regulations, and compliance hurdles on both sides.
How can Swedish companies prepare for the agreement?
Although the agreement has not yet entered into force, Swedish companies can already begin assessing how it may affect their business in India. This includes evaluating tariff opportunities, reviewing supply chains and sourcing structures, assessing compliance with Rules of Origin, and identifying any regulatory requirements that may continue to affect market access. Companies should also consider whether the agreement could create opportunities to expand exports, strengthen local operations, develop supplier partnerships or use India as part of a broader regional value-chain strategy.
How can Business Sweden support Swedish companies?
The EU–India Free Trade Agreement creates significant opportunities for Swedish companies, but understanding and capturing the benefits can be complex. The impact will vary depending on a company’s products, supply chains, market position and long-term ambitions in India. For many companies, the key questions will not only be how tariffs change, but also how the agreement affects competitiveness, sourcing strategies, localisation decisions, compliance requirements and market-entry strategies.
Business Sweden helps companies translate the agreement into concrete business opportunities. By combining trade-policy expertise with commercial, regulatory and market knowledge on the ground in India, we help companies assess how the agreement affects their business, identify the most relevant opportunities and risks, and support decisions related to exports, sourcing, partnerships, localisation and long-term expansion. We also help companies navigate practical questions related to market access, rules of origin, regulatory requirements and implementation developments as the agreement is rolled out.
Please reach out to
- Our India team (ask.india@business-sweden.se) for assistance with questions related to business opportunities, market access, partner identification, and establishment in India.
- Our Stockholm team (exportregler@business-sweden.se) for advice on rules of origin and origin procedures, customs matters, tariffs, and export regulations.