India And EU Finalise Strategic Trade Framework In Brussels, Targeting €120bn Bilateral Trade By 2030

India and the European Union on Friday finalised a strategic trade and investment framework agreement in Brussels, concluding nearly a decade of intermittent negotiations and setting a stated target of €120 billion in bilateral merchandise trade by 2030 — approximately 75% above the 2025 baseline of €68 billion and representing the most substantive bilateral-trade-framework outcome between the two parties since the original framework discussions opened in 2007.

The headline tariff-reduction architecture, formally agreed at the leaders' level by Prime Minister Narendra Modi and European Commission President Ursula von der Leyen at the Berlaymont signing ceremony, provides for the progressive elimination of EU tariffs on approximately 92% of Indian merchandise exports by tariff line — including the substantial textiles, apparel, and finished-pharmaceutical categories that account for the bulk of the current Indian export profile — alongside the parallel progressive elimination of Indian tariffs on approximately 78% of EU industrial-and-capital-goods imports, including the wider automotive, machinery, and chemical-intermediate categories that the European industrial base has been seeking access to the Indian market across.

The services-sector framework is the more strategically-distinctive element of the agreement. The mutual-recognition framework on professional-services credentials, the substantial liberalisation of business-mobility provisions for short-term professional travel and project-based deployment, and the parallel digital-services-and-data-flows framework collectively address the principal long-standing barriers to deeper integration between the two services-sector complexes. The Indian information-technology-and-business-services sector — anchored on Tata Consultancy Services, Infosys, Wipro, HCL Technologies, and the wider mid-tier operator complex — has been the principal commercial advocate for the agreement on the Indian side.

The geopolitical-strategic context is meaningful. The agreement represents the EU's most substantial bilateral-trade-framework outcome of the current Commission mandate — outranking, on either trade-volume or strategic-significance measures, the parallel frameworks the EU has concluded across the period with Indonesia, Mercosur, and the various smaller Indo-Pacific partners. For India, the framework represents the most substantial Western-partnership trade outcome since the comparable framework with the United Kingdom was concluded in early 2025 — and substantially advances the wider strategic-diversification framework the Modi government has been progressing across its second term.

For investors and policymakers across both jurisdictions, the principal forward variable through the second half of the year is the ratification trajectory. The agreement will require ratification by the European Parliament, the European Council, and — on the more sensitive provisions — by the individual EU member-state parliaments under the mixed-agreement framework. On current Commission expectations, the principal substantive provisions will enter into provisional application from Q1 2027 with full ratification completing across the subsequent twelve-to-eighteen-month window. The trade-volume impact is expected to manifest progressively through the late-decade cycle rather than as a single near-term step-change.