FAQ
What is the EU–India Free Trade Agreement and what is its overall objective?
The overall objective of the EU–India Free Trade Agreement is to reduce barriers to trade and investment between the EU and India.
In practical terms, the agreement is expected to over time reduce tariffs, improve market access, lower technical barriers, enhance regulatory transparency and predictability, and establish ambitious commitments on trade and sustainable development. This deal is expected to double EU goods exports to India by 2032 by eliminating or reducing tariffs in value of 96.6% of EU goods exports to India. Overall, the tariff reductions are estimated to save around €4 billion per year in duties on European products.
Overall, the agreement has the potential to reduce trade costs, increase transparency, and improve the trade and investment climate for Swedish companies in and with India.
How will the agreement affect tariffs on EU exports to India?
This deal is expected to double EU goods exports to India by 2032 by eliminating or reducing tariffs in value of 96.6% of EU goods exports to India. Overall, the tariff reductions are estimated to save around €4 billion per year in duties on European products.
Examples of major interest for Swedish industry include car tariffs being cut from 110% to as low as 10%, car-part duties being fully eliminated within 5–10 years, and tariffs of up to 44% on machinery, 22% on chemicals and 11% on pharmaceuticals largely removed.
What does the agreement mean for small and medium-sized enterprises (SMEs)?
The EU–India Free Trade Agreement is expected to be of particular benefit to small and medium-sized enterprises (SMEs), which are often disproportionately affected by tariffs, administrative burdens, and regulatory complexity when operating internationally. By reducing tariffs on a large share of EU exports to India and improving market access, the agreement aims to lower trade costs and make it easier for SMEs to enter or expand their presence in the Indian market.
There will also be a dedicated chapter in the agreement will further help SMEs take full advantage of the new export opportunities. For example, this chapter will put in place dedicated contact points on both sides to provide SMEs with relevant information on the FTA and help them with any specific issue they would face when trying to use the FTA's provisions.
Beyond tariff reductions, the agreement seeks to address non-tariff barriers by promoting greater regulatory transparency, more predictable rules, and simplified procedures for trade in goods and services.
When is the EU-India Free Trade Agreement expected to enter into force?
The announced agreement between the EU and India marks the conclusion of negotiations on the substantive content of the Free Trade Agreement.
The EU–India FTA will enter into force only after the completion of the respective internal procedures on both sides. These include legal review, translation into all EU official languages, formal signing, and lastly ratification in accordance with each party’s institutional and constitutional requirements.
The Commission will then put forward its proposal to the Council for the signature and conclusion of the agreement. Once adopted by the Council, the EU and India can sign the agreements. Following the signature, the agreement requires the European Parliament's consent, and the Council's decision on conclusion for it to enter into force. Once India also ratifies the Agreement, it can enter into force.
Based on experience from previous EU trade agreements, this process may take approximately 12 to 36 months from the agreement on the final text to its partial or full entry into force.
How can Swedish companies prepare for the agreement, and where can they get support and guidance?
Swedish companies should begin preparing by assessing how the agreement may affect their trade flows, supply chains, and market access in India, as well as by identifying potential opportunities for exports, investment, or local establishment.
Business Sweden is available to support Swedish companies throughout this process. Our teams provide guidance on how the agreement may impact individual business models, as well as practical support related to market entry and trade procedures. By combining on-the-ground expertise in India with policy and trade competence in Sweden, Business Sweden helps companies navigate both strategic and operational aspects of preparing for the agreement.
Our India team (ask.india@business-sweden.se) can assist with questions related to business opportunities, market access, partner identification, and establishment in India.
Our Stockholm team (exportregler@business-sweden.se) provides advice on trade procedures, customs matters, tariffs, and export regulations.