India–EU Free Trade Agreement: Cars, Chocolates and Medical Goods Will Get Cheaper?

India has successfully concluded a Free Trade Agreement (FTA) with the European Union, marking a major step in strengthening economic ties between the two regions. The agreement introduces wide-ranging tariff reductions across several European export sectors. As a result, many commonly imported products are expected to become cheaper in India over the coming years.

The deal aims to reduce trade barriers, simplify procedures, and make cross-border trade faster and more cost-effective. It also reflects India’s growing openness to global trade partnerships while maintaining a long-term focus on consumer access and industrial growth.

Luxury Cars and Automobiles to See Sharp Duty Cuts

One of the most significant outcomes of the agreement is the reduction in tariffs on European automobiles. Import duties on European cars will be gradually reduced from as high as 110% to 10%. This transition will apply to around 2,50,000 vehicles per year and is expected to reshape India’s premium car market.

Luxury car brands such as BMW and Mercedes are likely to benefit from this change, making high-end vehicles more affordable for Indian buyers over time.

Aircraft, Chemicals and Medical Equipment Get Relief

The agreement also brings substantial benefits to sectors beyond automobiles. Tariffs on aircraft and spacecraft are expected to be almost completely removed. Chemical products will face minimal tariff barriers, making industrial inputs more accessible.

Medical and healthcare equipment will also see a major reduction in duties. Around 90% of optical, medical and surgical equipment will be covered under reduced tariffs, potentially lowering costs for hospitals, diagnostic centres and patients across India.

Food, Beverages and Wines to Become More Affordable

Food and beverage products from the EU are another key focus area. Tariffs on European wines will be reduced to 20–30%, while duties on spirits will fall to 40% and beer to 50%. Products such as olive oil, margarine and vegetable oils will also see significant tariff cuts or complete removal, making imported food items more affordable for Indian consumers.

Wider Economic Impact of the Deal

The agreement will eliminate or reduce tariffs on over 90% of EU goods exported to India. It is expected to save up to €4 billion annually in duties on European products. High tariffs on machinery, chemicals and pharmaceuticals will also be removed, improving access to advanced goods and technologies.

Read more: EU Banks to Expand in India: New Deal Allows 15 Branches.

Conclusion

The India–EU Free Trade Agreement represents a major shift in India’s trade policy. With deep tariff cuts across automobiles, healthcare, food and industrial goods, the deal is expected to benefit consumers, businesses and importers. Over time, it could enhance competition, reduce prices and strengthen India’s position in global trade.

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