India–EU Trade Deal Lifts Hopes Across Services, Manufacturing, Markets
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India and the European Union have agreed on a long-awaited Free Trade Agreement, a move that both sides see as a step towards closer economic ties at a time of global trade uncertainty. The deal is expected to ease market access, cut tariffs across key sectors, and support talent and business movement between the two regions, though its real impact will depend on how quickly it is put into action.
Sachin Alug, CEO of NLB Services, said the agreement signals a deeper and more stable partnership between India and Europe.
“The India–EU Free Trade Agreement marks a clear shift toward a more strategic and enduring economic partnership. For Europe, India offers scale, diversified capabilities, and services that support innovation, resilience, and competitiveness. For Indian enterprises, the agreement provides structured access to one of the world’s most regulated and quality-driven markets, encouraging higher standards and value-led growth,” he said.
Alug noted that as European firms expand their presence in India, the focus is changing.
“As European organizations deepen delivery footprints in India, the focus is steadily moving beyond offshore hiring toward building resilient Global Capability Centers with stronger governance, compliance, and operating rigor,” he said. He added that this could drive demand in areas such as compliance, ESG reporting, data protection, engineering services, and workforce governance.
He also pointed to tariff cuts in the auto sector as a potential turning point.
“The phased reduction of motor vehicle tariffs from 110% to 40%, with a longer-term aim of 10% within defined quotas, has the potential to reshape automotive supply chains,” Alug said. “It lowers entry barriers while pushing companies to meet global quality, safety, and sustainability standards.”
On talent movement, he said simplified student access and a proposed EU office in India could help strengthen education and job pathways over time.
Market experts, however, urged caution on immediate expectations. P. Krishnan, MD and CIO at Spark Asset Management, said the deal is positive but not a quick win.
“The deal is positive for India. Add the steep INR depreciation of over 20% against the euro, and Indian exports will get very competitive,” he said. “However, it will take months for the deal to go live. Much will depend on execution.”
Krishnan added that the agreement was pushed faster due to global risks.
“This deal got expedited as both sides wanted some risk mitigation to counter the chaos being churned out by the US,” he said. “For markets, it lifts sentiment, but it is not a game changer and does not lead to earnings upgrades on its own.”
The chemical sector sees the agreement as a major boost. Gopal Agrawal, CEO of Anupam Rasayan India Limited, said tariff removal could unlock new opportunities.
“We welcome the historic India–EU Free Trade Agreement as a defining milestone for bilateral commerce and a transformative opportunity for India’s chemical industry,” he said. “The elimination of tariffs on a significant majority of chemical products will improve competitiveness and deepen engagement in specialty and performance chemicals.”
Agrawal said the EU is already a key market for the company.
“At Anupam Rasayan, the EU is one of our largest and most strategic export markets. This agreement will accelerate our global footprint and support sustainable export growth,” he said.
Wealth managers also see the deal as a strong signal. Nitin Rao, CEO of InCred Wealth, said the agreement comes at a crucial time.
“The trade deal between India and Europe is a much-needed and welcome development,” he said. “In a world seeing turmoil and tariff wars, this shows that India’s rule-based and independent approach is being recognised.”
Rao added that while early signs are encouraging, the real test will be in how the deal holds up over time.
“Early signals are bullish for India. If this holds, it could change how economic tariff wars are handled,” he said.
