India–EU free trade deal to cut import duties on chocolates, cars and machinery

A landmark India–European Union free trade agreement is set to significantly reduce import duties on a wide range of European goods, potentially making items such as chocolates, wine and cars more affordable for Indian consumers.

Under the deal, tariffs on many industrial products like machinery, medical equipment and pharmaceuticals will be cut or eliminated, while duties on European vehicles and alcoholic beverages are also being sharply reduced.

Duties on fruit juices and non-alcoholic beer will drop from up to 55% to zero. Processed foods such as bread, pastries, biscuits, pasta and chocolate will see tariffs fall from as high as 50% to zero.

Sheep meat will move from a 33% tariff to duty-free access, while sausages and other meat preparations will see duties reduced from up to 110% to 50%.

Edible oils will also become cheaper. Tariffs of up to 45% on products such as olive oil, margarine and other vegetable oils will be eliminated. Fresh fruits including kiwis and pears will see duties reduced from 33% to 10% within specified tariff-rate quotas.

Alcoholic beverages will witness some of the steepest reductions. Wine tariffs, currently at 150%, will be cut to 20% for premium wines and 30% for mid-range wines. Spirits will see duties fall from up to 150% to 40%, while beer tariffs will be reduced from 110% to 50%.

In the industrial segment, near-zero duties will apply to most goods. Tariffs on chemicals (up to 22%), iron and steel (up to 22%), pharmaceuticals (around 11%), plastics (up to 16.5%), machinery and electrical equipment (up to 44%), aircraft and spacecraft (up to 11%), and optical, medical and surgical equipment (up to 27.5%) will be eliminated for almost all products.

The automobile sector will see limited but significant relief, with import duties on motor vehicles reduced from 110% to 10% within a quota of 250,000 units.

Gems and jewellery will also benefit. Pearls, precious stones and metals, which currently attract duties of up to 22.5%, will move to zero tariffs for about 20% of products, with tariff reductions for another 36%.

Overall, the FTA is expected to lower costs, expand trade and create opportunities across agriculture, food processing, beverages, manufacturing, automobiles and high-value industrial sectors.