Energetica india Magazine

India-EU FTA to Cut Non-Tariff Barriers, Add CBAM Flexibility and Boost Clean Tech, Al Cooperation India and the European Union have concluded a long-awaited Free Trade Agreement (FTA), marking a major milestone in bilateral economic rela- tions. The announcement was made by Prime Minister Narendra Modi and European Commission President Ursu- la von der Leyen at the 16th India–EU Summit in India. The agreement addresses non-tariff barriers through strengthened regula- tory cooperation, enhanced transpar- ency, streamlined customs procedures and stronger sanitary and phytosan- itary standards. It also contains for- ward-looking provisions on the Europe- an Union’s Carbon Border Adjustment Mechanism (CBAM), including commit- ments on technical cooperation, recog- nition of carbon pricing and financial assistance to help reduce emissions. Intellectual property protections under the agreement reaffirm TRIPS provi - sions and recognise the importance of digital libraries, including India’s Tra- ditional Knowledge Digital Library (TKDL). Cooperation is also envisaged in emerging areas such as artificial intel - ligence, clean technologies and semicon- ductors. The European Union is one of India’s largest trading partners. In 2024–25, bi- lateral trade in goods stood at INR 11.5 lakh crore (USD 136.54 billion), with India’s exports valued at INR 6.4 lakh crore (USD 75.85 billion) and imports at INR 5.1 lakh crore (USD 60.68 billion). Trade in services reached INR 7.2 lakh crore (USD 83.10 billion) in 2024. To- gether, India and the EU account for 25 percent of global GDP and nearly one- third of global trade. Under the FTA, more than 99 percent of Indian exports by value will receive preferential access to the EU market. Labour-intensive sectors such as tex- tiles, apparel, leather, footwear, marine products, gems and jewellery, handi- crafts, engineering goods and automo- biles will benefit from tariff reductions of up to 10 percent, covering nearly USD 33 billion of exports. India-US Trade Deal: Tariffs on Indian Exports Cut to 18 Percent The United States has announced a new trade arrangement under which tariffs on Indian exports to the US will be re- duced, following a phone conversation between Prime Minister Narendra Modi and US President Donald Trump. Modi confirmed that Indian goods would now face an 18 percent tariff, down from the earlier reciprocal rate of 25 percent. He welcomed the move as a boost for Indian exporters and described it as a positive step for cooperation between the world’s two largest democracies. Union Minister Ashwini Vaishnaw said that the two countries had reached a “win-win” trade deal that would benefit industries and consumers on both sides. In his social media post, Trump said that the United States would lower its reciprocal tariff on Indian goods from 25 percent to 18 percent with immediate effect. As per reports, an additional 25 percent punitive tariff imposed earlier over India’s Russian oil imports would be withdrawn as part of the arrange- ment, resulting in a final tariff rate of 18 percent. Further, Trump said that the agreement went beyond tariff relief. In his social media post, he claimed that India had agreed to cut tariffs and non-tariff bar- riers on US goods to zero and commit to purchasing more than 500 billion dol- lars’ worth of American energy, technol- ogy, agricultural products, and coal. He also stated that India would halt pur- chases of Russian oil and instead source energy from the United States and po- tentially Venezuela, linking the move to efforts to end the Russia–Ukraine war. Indian statements, however, confirmed only the reduction in tariffs on exports to the United States. There has been no official confirmation from the Indian government on claims related to halt- ing Russian oil purchases or large-scale commitments to buy US goods and en- ergy. energetica INDIA- February_2026 16 GLOBAL PARTNERSHIPS