On the 27th of January 2026, the European Union (the “EU”) and India concluded negotiations for the largest free trade agreement (the “FTA”) either party has concluded.
This agreement in principle represents a fundamental recalibration of economic relations and carries substantial implications across multiple legal disciplines and business sectors.
For the EU, it would secure durable market access to one of the world's fastest-growing large economies. For EU-based businesses, particularly those operating across EU-India trade corridors or considering expansion into the Indian market, this agreement intends to materially expand the legal frameworks governing cross-border commerce and is envisaged to create enforceable regulatory pathways.
1. Market Access and Tariff Elimination
The FTA is confirmed to reduce tariffs on 96.6% of EU goods exports to India, saving European companies around €4 billion per year on duties. This encompasses unprecedented tariff cuts across automobiles, machinery, chemicals, pharmaceuticals, and agri-food products. EU goods exports to India are being projected to double by 2032.
In respect to services, the proposed FTA liberalises market access to both the EU and Indian service sectors. This includes privileged access for EU financial services, maritime transport, telecommunications, and professional services. For EU businesses it would reduce non-tariff barriers and according to India’s stated commitments on financial services, it may also reduce regulatory friction.
2. Intellectual Property Protection
The European Commission (the “Commission”) confirms that the agreement mandates high-level IP protection across copyrights, trademarks, patents, designs, trade secrets, and plant varieties together with measures, procedures and remedies to ensure enforcement.
3. Labour, Environment, and Sustainability
The agreement incorporates binding commitments to core International Labour Organisation (the “ILO”) conventions, including freedom of association, collective bargaining, prohibition of forced labour and child labour, and non-discrimination. For multi-jurisdictional employers and cross-border supply chain operators, these provisions create enforceable compliance obligations: non-compliance with ILO standards becomes subject to bilateral dispute resolution, potentially triggering trade remedies or compensation mechanisms.
4. Competition, Investment Protection, and Dispute Settlement
The Commission confirms that the proposed FTA shall establish aligned competition enforcement with information exchange on subsidies and bilateral cooperation between competition authorities.
5. Customs Simplification and Regulatory Harmonisation
The Commission has indicated that technical standards alignment across sanitary measures, certification requirements, and customs procedures will reduce compliance costs. Simplified customs clearance and rules-of-origin provisions are intended to facilitate supply chain restructuring for firms with cross-border manufacturing networks. Implementation procedures and transition timelines remain pending publication of official schedules.
At this stage, this is a political conclusion of negotiations. The final legal text remains unpublished and subject to legal review and translation into all EU languages. The text is not yet legally binding and does not create enforceable obligations until both the EU and India formally ratify it. Nevertheless, the conclusion of the FTA paves the way for new prospects to EU-based business across different sectors.
Malta is uniquely positioned to serve as a specialised hub for cross-border trade and services. As a jurisdiction with a robust financial services framework and a strategic maritime location, Malta offers a sophisticated platform for Indian entities looking to enter the EU and vice-versa. For Maltese businesses, this represents a window of opportunity to align commercial strategies with the upcoming legal framework. Maltese enterprises, particularly those in the manufacturing, pharmaceutical, and tech sectors, should thus actively consider starting to undertake market entry due diligence to be ahead of the curve once the final text is ratified.
For any further information or assistance, please contact us at info@gtg.com.mt
Author: Dr Neil Gauci