India and the European Union sealed a free‑trade pact that opens 97% of EU tariff lines, covering 99.5% of trade value. Immediate duty cuts apply to a sizable slice of goods, giving Indian exporters near‑universal access to the bloc that accounts for roughly 17% of India’s overseas sales.

More than half of Indian shipments to Europe already consist of petroleum, pharmaceuticals, electronics, minerals, auto components and textiles. Tariff eliminations now target labour‑intensive categories such as marine products, leather, footwear, garments, handicrafts, gems, jewellery, plastics and toys, sectors that together represent close to 2% of India’s export‑linked GDP and compete directly with China, Bangladesh and Vietnam.

EU capital already supplies about 15% of India’s FDI, led by the Netherlands, Germany, Belgium and France, mainly into IT and software. The agreement widens commitments across 144 services subsectors, from professional consulting to education, promising a steadier pipeline for Indian providers. Investors will watch whether manufacturing‑focused FDI, especially in autos and chemicals, picks up as the trade framework settles.