Table 1: India-EU bilateral trade in goods from 2019-2024 (value in Euro bn)

Source: Eurostat

Trading in goods has been increasing in the last five years. The top 10 items exported from India to the EU in 2024 is shown in Table 2.

Table 2: Top 10 exports to the EU from India in 2024 (HS level 6); Value in Euro million

Source: Eurostat

So, the question is: how will the mother of all deals affect these items of manufactured products being exported? According to an article in The Times of India (TOI), dated January 28, 2026, for India-EU FTA, duties will be "zero" on the products such as marine products (from 26 per cent), leather (from 17 per cent), chemicals (from 12.8 per cent), textiles and garments (from 12 per cent), home décor, furniture (from 10.5 per cent), base metals (from 10 per cent), toys and sports goods (from 4.7 per cent), and gems and jewelry (from 4 per cent).

Over and above the duty, the EU also levies VAT, which varies with the country. Overall, the EU customs duty rates vary between 0 to 26 per cent and the VAT generally varies between 17 per cent and 27 per cent. The way to calculate the total levy is illustrated as: If you import €5,000 worth of goods (CIF value) with €200 customs duty in France (20 per cent VAT): VAT = (€5,000 + €200) × 0.20 = €1,040. So, the total levy is 200+1040 = 1240, or 25 per cent, approximately. Hence, the effective levy on imports varies between 17 per cent to 45 per cent approx., which is pretty high. It should be noted that the levy is calculated on the CIF value. The CIF for EU is lower than that for the USA, typically.  Hence, it is cheaper to export to the EU than the USA. 

To get a rough idea of how much duty will be saved by each of the signatories, I have used some assumptions and data form various websites, as well as from the TOI (January 28, 2026). Based on these sources, and my own estimates/ assumptions, we can arrive at a picture as shown in Table 3. The Table 3 shows the value of exports to the EU by India in 2024 (top 10 items only), the duties before and after the deal, and the savings in duties due to the duty reduction. 

Table 3: Benefit of India-EU FTA for India on exports to EU

The total duty that India can save in its exports to EU will be about 9.1 per cent, overall. This is under the assumption that the freight rates will not go up to either partially or completely negate the lower customs duty benefits. Or, to generalize, under pari passu conditions. This savings can be converted into extra sales/ exports, and therein lies the advantage of this ‘mother of all deals’ exercise. It should be noted that the exports can increase further due to the improved receptivity at the EU end, smoother flow of materials covered by the FTA, faster clearances of goods, fewer rigorous inspections at check points, and an overall congenial atmosphere of trade. The same figure for the imports from EU will be 12.38 per cent, as shown in Table 4. 

Table 4: Benefit of India-EU FTA for EU on exports to India

Source: Eurostat

It appears that EU is benefitting more than India. It may be noted that, in the above calculations, we have not included the benefits to EU on cars (110 per cent), spirits (150 per cent), various items of consumption (between 33 per cent to 110 per cent). In view of these benefits, it can be expected that more goods will likely flow from EU to India. However, the flow of human talent will be quite the reverse, which is in India’s favour. One main reason is that the demographics overwhelmingly favour India. 

Table 5 indicates areas of exports from India which can benefit from the FTA.

Table 5: Areas of exports from India that will benefit from FTA

Source: Eurostat