Trade pact with EU, US in next few months: Piyush Goyal

Following the signing of the India–New Zealand FTA on April 27, 2026, the Ministry of Commerce signalled that trade agreements with the European Union and th...

What Happened

Following the signing of the India–New Zealand FTA on April 27, 2026, the Ministry of Commerce signalled that trade agreements with the European Union and the United States are expected to be formalised or advance significantly in the near term.
The India–EU Free Trade Agreement was concluded (negotiations completed) on January 27, 2026, following nearly two decades of on-and-off negotiations; it awaits legal review, translation, EU Council approval, and European Parliament ratification before entering into force (expected: early 2027).
A US–India Interim Trade Agreement framework was announced in February 2026, covering reciprocal tariff reductions — the US reduced tariffs on Indian goods from 50% to 18%, while India committed to eliminating or reducing tariffs on US industrial goods and agricultural products.
The New Zealand FTA is described as the seventh FTA under the current phase of India's trade expansion.
The concurrent progress on multiple major trade fronts — New Zealand, EU, and US — represents the most active period of Indian trade diplomacy since independence.

Static Topic Bridges

India–EU Free Trade Agreement: History and Current Status

India and the European Union launched FTA negotiations in 2007, but talks stalled in 2013 over deep disagreements on tariffs for automobiles, wines and spirits, market access for services, IP protections (particularly for generic pharmaceuticals), and government procurement. Negotiations were relaunched in 2022 and concluded in January 2026. The concluded text still must pass through EU procedural steps — legal review, translation into 24 EU languages, European Commission proposal to the Council, Council authorisation for signature, and European Parliament ratification — before entering into force.

India to progressively eliminate or reduce tariffs on 96.6% of EU exports, including: cars (from 110%), machinery and electrical equipment (up to 44%), chemicals (up to 22%), pharmaceuticals (11%)
EU gives improved market access to Indian goods, services (particularly IT and IT-enabled services), and investments
The EU is India's largest trading partner bloc (total trade ~EUR 130 billion annually)
A parallel Bilateral Investment Treaty and a Geographical Indications (GI) Agreement are being concluded alongside the FTA
Expected entry into force: early 2027

Connection to this news: The EU FTA, concluded just three months before the New Zealand FTA, represents the most economically significant bilateral trade deal India has ever signed, given the EU's size and depth.

India–US Trade Relations: From Tension to Interim Agreement

India–US trade relations passed through a period of significant friction after the US removed India from the Generalised System of Preferences (GSP) programme in 2019, citing concerns about market access barriers. Bilateral tariff disputes escalated with the US imposing Section 232 steel and aluminium tariffs. The February 2026 Interim Trade Agreement marks a reset: the US reduced tariffs on Indian goods from 50% to 18% (with additional tariffs removed in recognition of India's commitments on energy sourcing), and India committed to addressing non-tariff barriers in ICT goods and medical devices.

US GSP removal: June 2019 (India was the largest GSP beneficiary)
India–US bilateral trade: approximately USD 190 billion (2024); US is India's largest single-country trading partner
February 2026 Interim Agreement: US tariffs on India reduced from 50% to 18%
India committed to purchasing USD 500 billion in US energy, aircraft, technology, and coking coal over 5 years
Full Bilateral Trade Agreement (BTA) negotiations ongoing, covering services, investment, IP, labour, and environment
Dairy sector: US has flagged India's integrated veterinary health certificate requirement for dairy imports as a WTO trade barrier

Connection to this news: The US interim deal and ongoing full BTA negotiations represent a parallel track to the multilateral FTA programme, addressing bilateral trade imbalances and non-tariff barriers specific to the India–US relationship.

Generalised System of Preferences (GSP): A Multilateral Exception

The Generalised System of Preferences (GSP), adopted under GATT in 1971 and formalised in the Enabling Clause in 1979, allows developed countries to extend preferential (lower) tariffs to exports from developing countries without being required to extend the same rates to all WTO members (an exception to the MFN principle). India has been a significant beneficiary of GSP programmes historically, particularly under the US and EU schemes.

US GSP: authorised under the Trade Act of 1974; India was the largest beneficiary before removal in 2019
EU GSP: includes Standard GSP, GSP+, and Everything But Arms (EBA) for least-developed countries
India is not eligible for GSP+ (requires meeting human rights and governance benchmarks) but benefits from Standard GSP
GSP benefits are unilateral and non-reciprocal — distinct from FTAs which involve mutual concessions

Connection to this news: As India negotiates full FTAs with the EU and US, its relationship with these partners shifts from unilateral GSP-based preferences toward reciprocal, legally binding market access commitments — a more durable but also more demanding trade architecture.

Key Facts & Data

India–New Zealand FTA: signed April 27, 2026 (India's 7th FTA in current phase)
India–EU FTA: negotiations concluded January 27, 2026; entry into force expected early 2027
EU–India annual trade: approximately EUR 130 billion; EU is India's largest trading partner bloc
India to reduce tariffs on 96.6% of EU exports under the FTA
India–US Interim Agreement: announced February 6, 2026; US tariffs on India cut from 50% to 18%
India–US bilateral trade: approximately USD 190 billion (2024)
India's commitment: USD 500 billion in US energy, aircraft, and tech purchases over 5 years
India removed from US GSP: June 2019 (had been the largest GSP beneficiary)
WTO Enabling Clause (1979): legal basis for the GSP system
India's active FTA network (post-2020): UAE (CEPA, 2022), Australia (ECTA, 2022), Mauritius (CECPA, 2021), New Zealand (FTA, 2026), EU (concluded 2026)