Last Updated:February 27, 2026, 23:34 IST

The Department of Commerce had announced that India will receive MFN treatment in committed services sectors for a period of five years from the Agreement’s entry into force

India announced a landmark FTA with the European Union in January.

Weeks after India and the European Union (EU) clinched a historic free trade agreement (FTA) after nearly two decades of negotiations, the Department of Commerce on Friday released the provisional text of the agreement on its social media handles, which underscored that both countries will accord each other the Most Favoured Nation (MFN) treatment for a period of five years.

“After the historic conclusion of the India-EU Free Trade Agreement a few weeks ago, the provisional text of the agreement is now being made available. It provides a first comprehensive look at the scope and ambition of the agreement. Tariff schedules will follow at a later stage,” said the Commerce Department.

As per the text, each party shall accord the Most Favoured Nation treatment for a period of 5 years from the date of entry into force of this agreement. That treatment shall apply after five years only if both parties mutually agree in the review to be carried out.

Earlier, the Department of Commerce had announced that India will receive MFN treatment in committed services sectors for a period of five years from the Agreement’s entry into force, ensuring non-discriminatory market access.

The continuation of MFN benefits beyond five years will be subject to a review mechanism, including developments related to the entry, stay, and work rights of Indian students, as well as progress on social security arrangements with EU member states.

The provisional text of the India-EU FTA comprises 20 chapters, including trade in goods, customs and trade facilitation, trade remedies, professional services, financial services, digital trade, intellectual property, good regulatory practices, dispute settlement, code of conduct and more.

India-EU FTA

The EU-India Free Trade Agreement (FTA), concluded in January, was hailed by both sides as the “mother of all deals” as it opens up the vast market of 27 nations for India. It provides immediate duty-free access for over 70.4% of Indian tariff lines, covering more than 90.7% of its export value.

The European Union is India’s largest trading partner, with bilateral goods trade reaching $135 billion in FY 2023–24. Upon full implementation of the trade agreement, a staggering 99% of Indian exports will enter the EU without any duties offering a massive competitive edge to labour-intensive sectors such as textiles and leather.

A central element of the talks has been tariff reduction. India is expected to significantly lower import duties on European cars and wine, while the EU will ease access for Indian products such as textiles, garments, jewellery, chemicals, pharmaceuticals and electronics.

Talks on the India-EU FTA first began in 2007 but were suspended in 2013 over disagreements on tariffs, market access and regulatory standards. Negotiations were revived in 2022 and accelerated last year as global trade tensions intensified and both sides sought to diversify economic partnerships.

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