New Delhi [India], January 27 : The just-signed India-European Union Free Trade Agreement (FTA) is set to create a future-ready trade framework that advances next-generation sectors of the Indian economy, while strengthening market access, innovation, and sustainability for Indian businesses.
According to an official statement from the Ministry of Commerce and Industry, a central focus of the agreement is engineering and manufacturing, where India aims to accelerate its USD 300 billion ambition for engineering exports.
By unlocking opportunities in the USD 2 trillion EU market, the FTA strengthens India's global competitiveness and supports the integration of Indian manufacturers into European supply chains. The FTA framework places special emphasis on MSMEs and regional industrial clusters, enabling them to scale up and win global contracts.
The agreement also delivers strong intellectual property and patent protections, reinforcing safeguards.
Notably, the FTA provides special recognition to India's Traditional Knowledge Digital Library (TKDL), safeguarding traditional knowledge and supporting innovation rooted in indigenous systems. Sustainability and climate action also form a key pillar of the partnership.
The India-EU FTA supports the emergence of Green MSMEs by securing financial assistance to lower compliance costs and enabling the adoption of decarbonization technologies. While global competitors face rising regulatory pressures, India has obtained flexibilities to protect small businesses and ensure a smoother transition to international carbon standards.
To address climate-linked trade measures, the agreement enhances cooperation on Carbon Border Adjustment Mechanism (CBAM) readiness, according to the statement.
"While global competitors struggle, India has secured forward-looking flexibilities to protect our small businesses," the statement read.
Streamlined technical cooperation will ensure that Indian carbon credits and verification systems are globally recognised, while providing financial and technical pathways for MSMEs to meet CBAM norms. India has also secured Most-Favoured Nation assurances, ensuring access to the best possible trade terms under the FTA.
The FTA further boosts collaboration in AI, clean technologies and semiconductors, supporting India's technological advancement through R&D collaboration and technology transfer. In services, the agreement delivers ambitious commitments across IT-ITeS, professional services, education, finance and tourism, expanding opportunities for Indian service providers.
Overall, the India-EU FTA represents a future-ready trade framework, advancing innovation, sustainability and global competitiveness across key sectors of the Indian economy.