The EU–India Free Trade Agreement
How Indian and Romanian Companies Can Benefit from New Trade Opportunities
- Stronger Trade Relations
- Greater Market Access
- Business Partnerships
- Innovation & Growth
The EU–India Free Trade Agreement: Tariff Reductions and Market Access for Indian and Romanian Enterprises
Introduction
The conclusion of negotiations for the European Union–India Free Trade Agreement (FTA) marks an important development in international economic diplomacy. The agreement is designed to strengthen trade between two major economic regions by reducing tariffs, addressing regulatory barriers, improving customs procedures, and creating a more predictable framework for international businesses.
For Indian and Romanian enterprises, the agreement creates a framework to explore stronger commercial connections, supply-chain partnerships and access to new markets.
In 2024, bilateral trade in goods between the European Union and India reached approximately €120 billion, with EU imports from India at €71 billion and EU exports to India close to €49 billion. The agreement has the potential to further expand these trade flows and reshape supply-chain relationships between India and Europe.
For businesses, investors, and policymakers, the FTA goes beyond tariff reductions. It also addresses intellectual property protection, sustainable development, customs modernisation, and other regulatory issues that influence international trade.
Romania holds a strategically important position within this emerging EU–India economic corridor. As an EU member with competitive manufacturing, agricultural, and industrial sectors, Romania can benefit from improved access to the Indian market. At the same time, Indian companies can explore Romania as a potential gateway to Central and Eastern European markets.
Tariff Liberalisation and Market Access
A central feature of the EU–India FTA is the significant reduction of customs duties. The European Union has committed to eliminating tariffs on more than 90% of tariff lines, representing approximately 91% of total trade value. Eventually, more than 99% of India's current exports to the EU are expected to enter the European market duty-free.
The agreement does not remove all tariffs immediately. Instead, it follows a phased approach, with reductions taking place immediately or over five, seven, and ten-year periods. This allows businesses and sensitive industries sufficient time to adapt to increased competition.
For exporters, these reductions can improve price competitiveness, expand market opportunities, and encourage stronger integration between Indian and European supply chains.
Tariff advantages depend on the product classification, applicable tariff schedule, Rules of Origin and the agreement's implementation timeline.
Sector-Specific Opportunities
Chemicals, Plastics and Cosmetics
Indian exporters in chemicals and cosmetics have historically faced EU tariffs of up to 22%. Under the FTA, most of these tariffs are expected to be eliminated when the agreement enters into force, while remaining duties may be phased out over several years.
Plastic products may also benefit from tariff reductions, making eligible Indian products more competitive in European markets.
Engineering, Machinery and Medical Devices
Engineering and capital goods represent another important opportunity. EU tariffs on Indian medical instruments and optical devices, previously reaching up to 6.7%, are expected to be eliminated under the relevant provisions.
In heavy machinery and automotive sectors, some tariffs may be liberalised immediately, while others, including duties on automotive components, are subject to transition periods.
These changes can support trade in industrial equipment and encourage Indian and European companies to develop integrated manufacturing and supply-chain partnerships.
India–Romania Bilateral Trade
The broader EU–India FTA has direct implications for India–Romania commercial relations.
According to the figures provided in the source analysis, Romanian exports to India across goods and services were valued at approximately €378 million in 2025. The bilateral foreign direct investment stock stood at around €22 million in 2024.
Romania's goods exports to India were reported at approximately €255 million, with machinery and mechanical appliances accounting for around €83 million and electrical machinery and equipment representing approximately €36 million.
The reduction of Indian tariffs can provide Romanian manufacturers with stronger access to India's expanding market. At the same time, Indian businesses can benefit from Romania's geographical position, skilled workforce, manufacturing capabilities and access to the European Single Market.
Romania can serve as a potential location for Indian companies evaluating European expansion, while Romanian enterprises can explore demand in India's growing industrial and consumer markets.
Agricultural and Food Trade
Agriculture and processed food are among the sectors where the agreement may create opportunities for Romanian businesses. European agri-food exports to India have historically faced high tariffs, limiting market penetration.
Wines and Spirits
The source analysis identifies substantial proposed tariff reductions for European wines, spirits and beer. These changes could create opportunities for eligible Romanian beverage producers, subject to the final tariff schedules and applicable Indian regulations.
Vegetable Oils
Tariff changes affecting products such as vegetable oils and related goods may improve market access for eligible exporters.
Processed Foods
Products such as bread, pastries, biscuits, pasta and chocolate may benefit from reduced or eliminated duties under the relevant provisions.
Tariff benefits do not remove regulatory requirements. Exporters must continue to comply with applicable food safety, labelling, health and Sanitary and Phytosanitary (SPS) standards.
Customs Modernisation and Trade Protection
The agreement also focuses on making international trade more efficient.
The EU and India aim to strengthen customs cooperation through digital exchange of information, improved supply-chain security and more efficient border procedures. Simplified origin documentation, where applicable, can reduce administrative requirements and delays.
The agreement also provides for a bilateral safeguard mechanism. If a sudden increase in preferential imports causes or threatens serious injury to domestic industries, temporary protective measures may be available under the agreed rules.
Sustainability and CBAM
Sustainability is an increasingly important component of international trade. The EU–India FTA includes commitments relating to trade and sustainable development and relevant multilateral environmental agreements.
The agreement may also encourage trade in low-carbon technologies and environmentally sustainable goods.
Businesses must separately consider the European Union's Carbon Border Adjustment Mechanism (CBAM), which introduces carbon-related reporting and financial obligations for covered goods under its applicable rules.
Exporters in affected sectors should assess product coverage, carbon reporting, emissions data and applicable environmental compliance requirements before entering the EU market.
Intellectual Property Protection
Strong intellectual property protection is another important element of international commercial cooperation.
Effective IP protection can provide greater confidence to companies investing in technology, research, manufacturing and digital services. It can support technology transfers, joint ventures, research partnerships and investment between Indian and European businesses.
For India and Romania, intellectual property cooperation is relevant to IT, engineering, manufacturing and other technology-driven industries.
Strategic Implications for Businesses
The EU–India FTA provides a reason for companies to reassess their international market and supply-chain strategies.
Indian manufacturers can evaluate Romania as a strategic location for accessing the wider European Single Market. Romania's geographical position, industrial capabilities and workforce can support Indian companies considering European expansion.
Romanian businesses operating in machinery, automotive, engineering, agriculture and food processing can explore India as an export market and potential destination for commercial partnerships.
Businesses should review product portfolios, tariff classifications, Rules of Origin, certification requirements and compliance obligations to determine their eligibility for preferential market access.
Key Opportunities for Indian and Romanian Enterprises
Manufacturing
Industrial companies can evaluate opportunities in machinery, engineering, components and manufacturing partnerships across both markets.
Agri-Food Trade
Eligible agricultural and processed food exporters can explore new customers, distributors and commercial channels.
B2B Partnerships
Business associations and enterprises can develop direct connections, explore joint ventures and identify suitable commercial partners.
Market Entry
Companies can assess market demand, customs requirements, distribution options and regulatory obligations before expanding internationally.
Key Challenges Businesses Should Consider
- Rules of Origin: Products must meet the applicable origin criteria to qualify for preferential tariff treatment.
- Transition Periods: Certain sectors may receive tariff reductions gradually rather than immediately.
- Regulatory Compliance: Exporters must satisfy applicable technical, product safety, labelling and certification requirements.
- Environmental Obligations: Businesses dealing in covered goods must assess relevant carbon reporting and compliance requirements.
- Market Competition: Lower tariffs can increase competition, making quality, pricing, distribution and differentiation important.
The Role of The Union Of Bilateral Chambers of Commerce from Romania In India
As international trade becomes more integrated and increasingly regulated, institutional engagement can help businesses understand opportunities and build reliable commercial relationships.
The Union Of Bilateral Chambers of Commerce from Romania In India can support businesses and institutions through institutional dialogue, market intelligence, B2B engagement and the exploration of cross-border commercial opportunities.
For Indian businesses considering European markets and Romanian enterprises exploring opportunities in India, market research, regulatory understanding and reliable institutional connections are important parts of international expansion.
Companies should assess their specific objectives, identify suitable partners and review the relevant trade requirements before making investment or export decisions.
Frequently Asked Questions
1. What is the EU–India Free Trade Agreement?
The EU–India Free Trade Agreement is intended to strengthen economic cooperation between India and the European Union through tariff reductions, improved market access and trade-related cooperation. Businesses should verify its current legal status and implementation schedule.
2. How could the agreement benefit Indian businesses?
Eligible Indian exporters may benefit from reduced EU tariffs, improved competitiveness and new opportunities to develop partnerships with European businesses.
3. How could Romanian businesses benefit?
Romanian companies may be able to expand exports to India and explore partnerships in machinery, engineering, agriculture, food processing and other eligible sectors.
4. Why is Romania important for India–EU trade?
Romania's EU membership, geographical position and industrial capabilities make it a potential location for Indian companies evaluating access to European markets.
5. Which sectors offer potential opportunities?
Potential areas include machinery, engineering, chemicals, medical devices, automotive components, agriculture, processed foods, technology and business services, depending on the applicable trade provisions.
6. Will all tariffs be removed immediately?
No. Tariff treatment varies by product. Some reductions may be immediate, while other products may be subject to phased schedules or exclusions.
7. What are Rules of Origin?
Rules of Origin determine whether goods qualify as originating products under a trade agreement. Businesses must meet the relevant criteria to claim preferential tariffs.
8. What is CBAM?
The Carbon Border Adjustment Mechanism is an EU framework covering specified carbon-intensive goods. Businesses should confirm whether their products fall within its scope and identify applicable reporting and payment requirements.
9. Do agricultural exporters still need certification?
Yes. Any applicable food safety, health, labelling and sanitary or phytosanitary requirements continue to apply even where tariff reductions are available.
10. How should businesses prepare?
Businesses should examine tariff schedules, product classifications, origin requirements, certification, environmental obligations and potential commercial partners before entering a new market.
11. How can the organisation support business cooperation?
The Union Of Bilateral Chambers of Commerce from Romania In India can facilitate institutional engagement, B2B dialogue and exploration of potential commercial connections between Indian and Romanian enterprises.
Conclusion
The EU–India Free Trade Agreement represents an important development in international trade relations. Its proposed tariff reductions, customs cooperation and trade-related provisions can create opportunities for companies seeking to expand across India and Europe.
For the India–Romania economic corridor, potential opportunities span manufacturing, engineering, agriculture, food processing, technology and commercial partnerships.
Businesses should assess the relevant tariff schedules, Rules of Origin, implementation timeline and regulatory requirements to determine how the agreement may affect their operations.
With informed market research and effective institutional engagement, Indian and Romanian enterprises can explore opportunities for stronger and more sustainable cross-border commercial relationships.
Explore India–Romania Business Opportunities
Connect with The Union Of Bilateral Chambers of Commerce from Romania In India to explore institutional engagement, B2B connections and potential cross-border commercial partnerships.
Email: office@ubccrindia.com
Phone: +91 9810918134