Cars, Whiskeys, Cosmetics, Diamonds, More Prices To Fall After India-EU Trade Deal; Full List Of Items

India and the European Union have signed the biggest foreign trade agreement (FTA) in their history. It is called the mother of all deals. Key economic sectors such as agri-food, chemicals, textiles, footwear, and pharmaceuticals, among others, have received a mega booster as both countries announce deep tariff cuts to boost their exports, a move that comes amidst rising geopolitical and trade tensions globally.

The new trade deal leads to about 96.6%% trade liberalisation for India and 99.3% trade benefits for the EU.

Under the FTA agreement, India will eliminate tariffs on 86% of its tariff lines for goods and services imported from EU. While EU has announced to cut tariffs on 90% of their tariff lines on goods and services from India.

Which Sectors To Benefit?

"The India-EU Free Trade Agreement opens up one of the most important trading corridors in the world. For India, long a global leader in services, this pact expands access to the European market for its skilled professionals, technology services, and knowledge-based industries, at a time when human capital and digital capabilities are becoming central to global competitiveness," said Dinesh Kanabar, Chairman & CEO, Dhruva Advisors.

For European Union, sectors like agri-food, chemicals, pharmaceuticals, machinery, medical devices, avionics and automotive industries has received major boost.

For India, sectors like fisheries, chemicals, textiles, footwear and pharmaceuticals are key beneficiaries.

European Union Commission President, Ursula von der Leyen said, "Europe and India are making history today," adding, "We have concluded the mother of all deals."

"We have created a free trade zone of two billion people, with both sides set to benefit," she said.

Ursula further said on strengthening relationship with India, "This is only the beginning"

Meanwhile, Prime Minister Narendra Modi pointed out that the free trade agreement with the EU will complement the agreements with Britain and EFTA, thereby reinforcing both trade and global supply chains.

He stressed that this deal will not only boost manufacturing in India but also expand the services sector further. He affirmed that the free trade agreement will strengthen global business and investor confidence in India.

India-EU Trade Deal: Full List Of Items To Get Cheaper

India will remove duties on industrial products (which, on average, are above 16%), such as:

- Chemicals (current tariffs of up to 22%, to be removed mostly at entry into force of the agreement).

- Cosmetics (current tariffs of up to 22%, to be removed mostly after 5 or 7 years).

- Plastics (some at entry into force, many after 7 years).

- Car parts (most tariffs to be removed after 5 to 10 years).

- Textiles and apparel (most tariffs removed at entry into force)

- Ceramics (most tariffs removed at entry into force)

- Machinery (half of the tariffs liberalised at entry into force and the rest in periods of up to 10 years)

Boats (mainly at entry into force)

As per the trade document, these duty reductions and eliminations will facilitate EU exports of these products which could not access the Indian market so far given the high tariff barriers.

Furthermore, on the agri-food sector, considering the very high level of protection and the sensitivities of India, the Agreement is balanced because it opens market access in key export interests while preserving sensitivities.

That being said, the agreement will trim duties on several key EU agri-food exports, such as:

- Olive Oil (current tariff up to 45 %, to be eliminated at entry into force or after a 5-year staging)

- Non-alcoholic beer and several fruit juices (current tariff up to 55 %, to be eliminated in 5 years)

- Processed food such as confectionary, breads, pastry, pasta, chocolates, pet food (current tariff 33%, to be eliminated at entry into force or after staging)

- Sheep meat (current tariff 33%, to be eliminated over staging)

- EU exports of alcoholic beverages currently subject to very high tariffs (reaching 150% in some cases) will be reduced over time to 30% for most wines, 40% for all spirits and 50% for beer.

- EU exports of fruits (e.g. kiwis and pears) will benefit from sizeable Tariff Rate Quotas (TRQs) allowing to expand EU market shares in India; and

For the European Union, Kanabar explained that India represents both a vast consumer market of 1.4 billion people and a fast-growing economy with rising demand for advanced manufactured goods, green technologies, pharmaceuticals, and capital equipment. Reduced tariffs and clearer market access will allow European firms to participate more deeply in India's growth story.

The FTA agreement is expected to save up to 4 billion euros per year in duties on European products.

But beyond that, the expert added, the agreement strengthens strategic partnership between two major democratic blocs, promotes investment, technology collaboration, and resilient supply chains. In that broader sense, this is not merely a trade deal, but a platform for long-term economic partnership-rightly being hailed as the "mother of all deals."

EU is among top trade partners of India in goods. By end of financial year 2024-25, India's total trade in goods with the EU stood at $136 billion, of which exports were at $76 billion and imports at $60 billion.

India which is the fourth largest economy in the world, is EU's ninth largest trading partner.