The agreement is expected to enhance the competitiveness of key Indian commodities, including tea, coffee, spices, fresh fruits and vegetables, and processed food products in EU. The development assumes significance in the backdrop of the EU accounting for 12-13%, or about $4.4-4.8 billion, of India’s total agricultural exports of $37 billion by value in FY2024-25.
“India has prudently safeguarded sensitive sectors, including dairy, cereals, poultry, soymeal, certain fruits and vegetables, balancing export growth with domestic priorities,” India’s commerce and industry ministry said in a statement.
The development also assumes significance given that agriculture and allied sectors account for around 18% of India’s gross domestic product (GDP), with nearly 46% of the country’s workforce dependent on agriculture.
“Preferential Market Access for agricultural products like tea, coffee, spices, grapes, gherkins and cucumbers, dried onion, fresh vegetables and fruits as well as for processed food products will make them more competitive in the EU,” India’s commerce and industry ministry said in a statement and added, “This market access will strengthen farmers’ realised incomes, reinforce rural livelihoods, and elevate the global competitiveness of Indian agricultural products.”
This comes in the backdrop of India’s farm output expected to grow by 3.1% in the current fiscal, according to the first advance estimates released by the National Statistical Office (NSO). The sector grew by 4.6% in FY 2025, 2.7% in FY24, and 3.5% in FY23.
Massive tariff cuts
The FTA proposes immediate duty elimination for key Indian exports such as tea, coffee, and spices, along with increased access for fresh fruits, vegetables, table grapes, gherkins, cucumbers and dried onions. Further, for imports from EU, 45% tariffs on olive oil will be eliminated over five years, with preferential access to apples, pears, peaches, and kiwi fruit via Tariff Rate Quotas (TRQs).
Tariff Rate Quotas are a trade mechanism that allows a limited quantity of a product to be imported at a lower tariff, while imports beyond that limit face higher duties.
“This will strengthen rural incomes, women’s participation, and India’s position as a premium, trusted supplier in Europe,” the commerce and industry ministry’s factsheet said.
“EU will protect its agricultural sensitivities, which means that no concession will be granted for sugar and ethanol, rice and soft wheat, beef and poultry, milk powders, banana and honey; and well-calibrated quotas will limit imports of table grapes and cucumbers,” EU said in a statement.
“In addition, as per the SPS chapter, the EU will protect its very high sanitary and phytosanitary standards and the EU’s stringent rules on animal and plant health, and food safety will be maintained with no exception,” the EU statement added.
The EU and India are currently negotiating a separate agreement on Geographical Indications (GIs), including basmati rice and European cheese.
“The agreement offers significant gains for horticultural trade, with research predicting a 33% increase in the trade of vegetables, fruits, and nuts. Fresh and dried grapes remain a dominant export, but the deal is expected to ease non-tariff barriers that previously led to shipment rejections,” said Deepak Aggarwal, secretary, Nuts & Dry Fruits Council of India, an industry lobby group representing businesses involved in the import, processing, trading, and distribution of nuts and dry fruits in India.
Doubling agri-food exports
Also, reducing tariffs on marine exports to 26% will help increase India’s marine exports to EU from the present level of $1.12 billion in FY25.
“This enhanced market access is expected to significantly improve the competitiveness of India’s marine exports, while complementing and strengthening India’s export capacity in the marine sector, currently valued at ₹8,715 crore ($1 billion) to EU. The FTA will turbo-charge exports of shrimp, frozen fish, and value-added seafood exports, empowering coastal communities in Andhra Pradesh, Gujarat, Kerala, and beyond and India’s blue economy,” the commerce and industry ministry’ statement added.
Under FTA, India has secured easier access to European markets for almost all its exports, with preferential treatment covering 97% of tariff lines and 99.5% of the total trade value. Most of the benefits will be immediate. About 70% of tariff lines, accounting for over 90% of India’s exports, will get zero-duty access right away. This will mainly help sectors such as textiles, tea, coffee, spices, sports goods, toys, gems and jewellery, and some marine products, according to the government statement.
Another 20% of tariff lines, covering nearly 3% of exports, will see duties reduced to zero gradually over three to five years for products including certain marine items and processed foods. Yet another 6% of tariff lines, representing around 6% of exports, will receive partial tariff cuts and limited access through quota systems, including products such as poultry items, preserved vegetables, bakery products, and specific shrimp and prawn products.
Experts say India’s agri-food exports to EU will be doubled.
The conclusion of the EU–India trade agreement is a positive development on paper, but its real impact will depend on effective implementation, agri economist G. Chandrashekhar, who has been part of the World Bank-Government of India (ICAR) joint project – National Agricultural Innovation Project.
Key Takeaways
- FTA could increase India’s agri-food exports to the EU by up to $3.5 billion, nearly doubling the current trade volume.
- A good 70% of tariff lines will receive zero-duty access immediately, benefiting tea, coffee, and spices.
- India has excluded sensitive sectors like dairy and poultry to protect local farmers’ livelihoods.
- Reduced tariffs are expected to turbo-charge the seafood industry, particularly in Andhra Pradesh and Gujarat.
- EU will not relax its strict food safety standards, meaning Indian exporters must upgrade traceability and quality control to benefit.
Duty on seafood
“The deal offers India a significant opportunity to expand exports of a wide range of agricultural commodities to EU, provided the country strategically leverages its inherent strengths. At the same time, there is an urgent need to promote mutual investment, along with joint research initiatives and the exchange of technology, to fully realise the agreement’s potential,” Chandrashekhar said.
The upside could be nearly $2.5-3.5 billion in agri-food exports, taking India-EU trade to $7-8 billion on account of this agreement, said Srinivas Kuchibhotla, partner at Deloitte India.
“The execution of the FTA holds immense opportunity and potential to be a structural inflection event for India’s export vision in agriculture and allied sectors for Viksit Bharat 2047. Indian exports of food and beverages to EU stood at $4.2 billion in 2024, led by seafood, spices, and the inbound into India from EU of agrifood totalled about $1.5 billion, underscoring both latent demand and potential untapped exim opportunities between the geographies,” Kuchibhotla added.
Meanwhile, the Seafood Exporters Association of India (SEAI) said the agreement will reduce the duty on seafood exported from India from 4.2-7.5% to nil, giving India a level playing field with competitors from other countries and regions.
The exports to EU have increased from 137,139 tonnes in April to November 2024 to 176,367 tonnes in the corresponding period of the current financial year, showing an increase of 28% in quantity.
In value terms, exports to this region increased by 37.8%, from $716.95 million in April to November 2024 to $988.22 million in April to November 2025.
“We are confident that this move will achieve our objective of diversification of markets and enable our produce to attain the pole position in this region,” said G. Pawan Kumar, president, SEAI.