India-EU FTA: Why It Matters for Indian Exports, IT Services and Professionals

India and the European Union (EU) on Tuesday signed a landmark free trade agreement (FTA) during the 16th India-EU Summit held in New Delhi, marking a major step forward in bilateral economic cooperation. The pact, described by officials as the “mother of all deals”, is expected to significantly deepen trade, investment flows and strategic collaboration between the two economies.

Under the agreement, more than 99 per cent of Indian exports, by value, will receive improved access to the EU market. In return, the EU expects its exports to India to double by 2032, driven by tariff reductions and smoother market access conditions. Once the agreement comes into force, tariffs of up to 10 per cent on around $33 billion worth of Indian exports will be phased out, providing a substantial boost to India’s export competitiveness.

Below is a detailed breakdown of the key provisions of the India-EU trade deal, based on FAQs released by the Ministry of Commerce and Industry.

How Will Indian Farmers Benefit From the India-EU Trade Deal?

Expanded Market Access for Agricultural Exports

The agreement is expected to provide a strong boost to Indian agriculture and processed food exports. Indian farmers and agri-exporters will gain enhanced market access in the EU for products such as tea, coffee, spices, grapes, gherkins and cucumbers, dried onion, fresh fruits and vegetables, and processed foods.

This improved access is expected to benefit export-oriented farming clusters, food processing units and agri-MSMEs, while supporting higher farm incomes and value addition.

Protection for Sensitive Agricultural Sectors

India has safeguarded sensitive sectors to protect domestic producers. The agreement excludes or protects key items such as beef and poultry, dairy, fish and seafood, cereals including rice and wheat, fruits and vegetables, nuts, edible oils, tea, coffee, spices and tobacco, ensuring that domestic agriculture remains insulated from import shocks.

How Does the FTA Support Indian IT and Professional Jobs?

Mutual Recognition of Professional Qualifications

Both sides have agreed to identify professional services where mutual recognition agreements (MRAs) can be negotiated. Importantly, they have also committed that if the EU signs a recognition agreement with any third country, it will begin similar talks with India in a time-bound manner.

This provision is expected to benefit Indian professionals across IT, engineering, consulting, education and other skilled services.

Why the Services Sector Is Central to the India-EU Deal

Services Dominate Both Economies

The services sector plays a crucial role in both regions. In the EU, services account for about 73 per cent of gross value added (GVA), while in India the sector contributes around 55 per cent of GVA.

Recognising this importance, the FTA places strong emphasis on services liberalisation and mobility.

Services Covered Under India-EU Commitments

Market Access for Indian IT and Business Services

India has secured commercially meaningful market access and national treatment from the EU in around 144 sectors and sub-sectors. These include IT and IT-enabled services, professional services, business services and education services—areas where India has a strong global presence.

India’s Commitments to the EU

In return, India has offered commitments in 102 sectors and sub-sectors, covering EU priority areas such as maritime transport, financial services, telecom services and environmental services.

Key Commitments in Financial Services and Digital Payments

In financial services, both sides have agreed on obligations that could strengthen India’s fast-growing digital payments ecosystem. The deal creates opportunities for Indian payment service providers in the EU and allows India to leverage its expertise in platforms such as UPI.

The agreement also supports cooperation in fintech innovation. For the EU, India has committed to allowing 100 per cent foreign direct investment (FDI) in insurance and 74 per cent FDI in banking services. India has also agreed to permit 15 new bank branches over four years for EU banks.

What the Deal Means for Telecom Services

The telecom services annex establishes a balanced and transparent framework for cooperation between India and the EU. It covers rules on access to telecom networks, interconnection, essential facilities, submarine cable systems and competition safeguards.

At the same time, both sides retain the right to set universal service obligations and manage limited resources such as spectrum and numbering, preserving regulatory autonomy.

Opportunities for AYUSH and Traditional Medicine Practitioners

The trade deal opens new avenues for AYUSH practitioners in the EU. In member states where specific regulations are not in place, Indian practitioners will be allowed to offer services based on professional qualifications obtained in India, expanding the global footprint of traditional Indian medicine systems.

How Long Can Indian Service Providers Stay in the EU?

The agreement clearly outlines mobility provisions for Indian professionals:

• Business visitors and short-term business visitors: Up to 90 days in any six-month period

• Managers and specialists under intra-corporate transfers: Three years, extendable by two years under domestic laws

• Trainee employees: One year, extendable by two years

• Contractual service suppliers and independent professionals: Cumulative stay of 12 months

These provisions are expected to support Indian IT firms, consultancies and service exporters operating in Europe.

Why the India-EU FTA Is a Strategic Milestone

The India-EU Free Trade Agreement represents one of India’s most comprehensive trade pacts, covering goods, services, investment, digital trade and professional mobility. With the EU being one of India’s largest trading partners, the deal is expected to boost exports, create jobs, support farmers and strengthen India’s position in global value chains—while preserving safeguards for sensitive domestic sectors.