The EU and India form the world's largest free trade area

On 27 January 2026, the European Union and India concluded  negotiations on a free trade agreement (FTA). Although the formal signing of the agreement will take place only after legal procedures in the EU and India, the agreement already opens up huge opportunities for companies from Europe, including Poland.

The Indian market covers about 2 billion people, which creates great opportunities for Polish and European products. In 2024, trade in goods between the EU and India amounted to €120 billion, of which EU exports to India amounted to €49 billion while imports amounted to €71 billion.

Opportunity for selected industries

The agreement provides for the elimination or reduction of customs duties on almost all goods: the EU removes duties on 91 percent of the value of exports, and India on 93 percent of the value. In practice, this means that products that have so far faced high tariff barriers will soon be able to freely enter the partner’s markets.

This  is good news for Polish agri-food exporters. Tariffs will be reduced on:• edible oil (from 45% to 0-5% over 5 years);• non-alcoholic beer and fruit juices (from 55% to zero in 5 years);• processed foodstuffs, including bread, confectionery, pasta, chocolate and pet food (from 33% to zero in stages);• sheep meat (33% to zero in stages).

At the same time, tariffs on wine, spirits and beer will fall significantly: to 30 percent for most wines, 40 percent for spirits and 50 percent for beer. Fruits such as kiwis and pears will be able to be imported under Tariff Rate Quotas (TRQ), which will increase the EU’s share of the Indian market.

In the industrial sector, high tariffs on cars, car parts, chemicals, cosmetics, machinery, medical devices and avionics will be lifted. It is worth noting that India is removing customs duties, which in some cases reached as high as 22 percent. (chemicals, cosmetics) or over 16 percent on average for industrial products.

SMEs and simplified customs procedures

The new agreement takes into account the needs of small and medium-sized enterprises. Contact points for SMEs will be created, and a self-certification system will  allow for easy documentation of the origin of goods. Customs procedures will be simplified, which means faster movement of products across borders and less bureaucracy.

Services, digitalisation and innovation

The agreement also opens up the services market: in 2024, trade in services between the EU and India amounted  to €59.8 billion (EU exports – €26 billion, imports – €33.8 billion). The new rules will increase predictability for financial, transport and technology service providers, including professionals and company boards.

In the area of digitalisation, the agreement introduces rules for the protection of software sources, e-commerce security and consumer protection, providing companies with legal certainty and the posibility to innovate.

Sustainability and Labour Rights

The FTA takes into account environmental and social issues:

• the protection of forests, biodiversity and marine resources;
• the fight against wildlife trafficking, illegal fishing and deforestation;
• cooperation on renewable energy sources and emission reduction in the maritime sector.

Labour law has been fully integrated into the FTA: the prohibition of forced and child labour, freedom of association, safe working conditions and gender equality.

Disputes and implementation mechanisms

The agreement provides  for dispute resolution mechanisms, including independent panels and mediation, as well as  a Rapid Reaction Mechanism for rapid response to trade problems. In addition, an institutional structure will be set up to oversee the implementation of the agreement: a Joint Committee and Specialized Committees, allowing for the participation of civil society and businesses.

Why it is important for Poland

For Polish companies, it is an opportunity to increase their presence in one of the fastest growing markets in the world. From agriculture to industry to services and technology, the liberalisation of the Indian market offers a real opportunity to increase revenues, diversify markets and increase competitiveness.

The EU-India agreement also shows that trade cooperation can go hand in hand with the principles of sustainable development and the protection of workers’ rights. It is a next-generation FTA that not only liberalizes trade, but also creates a framework for stable, predictable and responsible economic relations.

Source: European Commission, „EU and India conclude landmark Free Trade Agreement”, 27.01.2026

Translated by IDC

JL