India-EU FTA could apply duty cuts from early 2027, Goyal says

Trade minister Piyush Goyal said on 22 October that the India-EU free trade agreement could become operational four to five months after it is signed¹. He said signature is expected before the end of 2026, during a visit to Germany¹. The trip also takes him to the Netherlands with about 100 businesses and startups⁶.

In New Delhi the same day, Prime Minister Narendra Modi and Polish Prime Minister Donald Tusk called for early signing and ratification of the pact⁷. They agreed to work towards doubling India-Poland bilateral trade by 2030⁷.

Concluded, not signed

Negotiators finished on 27 January 2026². On 11 September 2026, the European Commission sent the Council of the EU its proposals for the signature and conclusion of the agreement². The Council must approve signature, the European Parliament must consent, and India's Union Council of Ministers must clear it³.

Goyal's four to five months is therefore a target, not a timetable. The Economic Times report said the deal is expected to be signed in December and may come into force next year⁸.

The India package has three parts: a trade agreement, an investment protection agreement and a geographical indications agreement². Investment protection is the kind of content that pulls in national parliaments⁹. The EU has applied the trade parts of such deals provisionally in the past. CETA has been provisionally applied since 21 September 2017; by May 2026 only 17 of 27 member states had ratified it¹⁰.

So duty cuts could start before every EU parliament has voted. The start still depends on a Council decision and a European Parliament vote that have not happened.

Which duty lines are in play

The European Commission says the agreement eliminates or reduces tariffs on over 96% of EU goods exports to India. It puts the saving at around €4 billion a year in duties². It names wine, olive oil, chocolate and pastries among the food lines where high duties go².

Reported terms include removal of duties that now run up to 44% on machinery, 22% on chemicals and 11% on pharmaceuticals³. Tariffs on cars, put at up to 110%, would fall to 40%³. A limited number of cars priced above €15,000 would be cut at once, with further reductions to 10% over time; up to 250,000 EU cars would get the lower rates³. Duties on spirits would come down to 40%³.

Those lines match what India buys. EU sales to India are led by machinery and appliances, transport equipment, optical and medical instruments, and chemicals¹¹. India imported $66.18 billion of goods from the EU in 2025-26, up 9% from $60.68 billion a year earlier⁸.

Two cautions. Those details come from official briefings and press reporting, as summarised by Wikipedia, so tie any business case to the legal text and to India's customs notification³. And the cuts are phased over several years rather than switched on at entry into force³.

Origin decides whether you get the rate

A preferential rate applies only to goods that originate in the partner country. Origin turns on where a product was substantially transformed, not where the brand sits¹². An EU-branded pump, instrument or machine made in China or Vietnam would not normally qualify¹².

Swarup said industry needs product-specific guidance on tariff concessions and rules of origin⁸. The practical step is to ask each supplier for the origin rule on the HS line and for the origin declaration it can issue.

The EU costs the FTA does not remove

The EU's carbon border adjustment mechanism has applied in its definitive form since 1 January 2026. It covers cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. Importers must be authorised, report embedded emissions, and buy and surrender certificates⁴.

The Commission calculates the certificate price from EU ETS auction prices. It published prices for the first three quarters of 2026 on 7 April, 6 July and 5 October, and the fourth-quarter price is due on 4 January 2027⁵. Certificates must be bought on the common central platform from February 2027, and from 2027 the price is set weekly⁵.

Goyal used the same Berlin appearance to attack these costs. He said the EU had piled up around 75-77 regulations¹³. The report said CBAM could mean tariffs of 20-35% on Indian steel, aluminium and cement exports¹³. Swarup said EU rules on product safety, standards, traceability and carbon will force smaller Indian firms to invest in certification and cleaner technology⁸.

For exporters, a real but partial gain

EU duties of up to 12-17% on Indian textiles, leather and footwear would go³. India's goods exports to the EU fell 4.57% to $72.4 billion in 2025-26⁸. Swarup's warning is that tariff cuts alone will not lift exports without quality upgrades and European buyer relationships⁸. Indian exports to Poland were about $2.8 billion in FY26, against $1.2 billion of imports⁷.

What to do this quarter

• Map EU-origin spend by HS line and record the duty you pay today.
• Ask each supplier where the goods are made, and for the origin declaration it will issue.
• Model staged cuts over several years, plus volume limits on quota lines.
• Keep CBAM and deforestation compliance in a separate line on export models; the FTA does not offset them^4, 13.
• Do not assume duty-free access from a fixed date in any price commitment.