India-EU FTA may come into effect in January-March, says Piyush Goyal | Economy & Policy News

India’s free trade agreement (FTA) with the European Union (EU) may come into effect in the first quarter of 2027 after being signed by the end of 2026, Union Commerce Minister Piyush Goyal said on Thursday.

 

“The EU agreement was announced on the 27th of January and will be signed before the end of the calendar year 2026,” Goyal said at the Berlin Global Dialogue in Germany. “And will be operationalised probably in the first quarter of 2027,” he added.

 

Goyal is currently on a six-day visit to Germany and the Netherlands, which will conclude on Tuesday, ahead of the signing of the India-EU trade agreement. The visit is aimed at deepening strategic economic partnerships, expanding bilateral trade and advancing industrial and technological collaboration.

  

The Indian minister also cautioned that the various regulations and standards rolled out by the EU not only pose non-tariff barriers to trade but may also hurt the European economy.

 

“What is Europe doing? They are shooting themselves in their own feet. More and more regulations, more and more restrictions on themselves. Closing their borders–something which actually helped them become a developed set of nations,” Goyal said.

 

“You put a CBAM (carbon border adjustment mechanism) on yourself, you put a 50 per cent import duty to bring steel into your country– you are inviting disaster,” Goyal added.

 

The EU’s safeguard regime for steel, which came into effect on July 1, provides tariff-rate quotas (TRQs) for shipments. Steel imports within the TRQ attract zero duty in the EU, while imports above the quota are subject to a 50 per cent tariff. The EU’s total annual duty-free steel quota limit stands at 18.3 million tonnes (mt).

 

New Delhi has secured a steel quota of over 1.9 mt under the EU’s country-specific and residual quotas. Indian government officials estimate that the country’s annual steel exports to the EU may stand at 2.8 mt.

 

India exported 3.8 mt of steel worth $3.4 billion to the EU in 2025-26, according to data available with the Department of Commerce.

 

“Bear in mind, the world is a reciprocal world now,” Goyal said at the event. “In this reciprocal world, you bring in a regulation and stop some other country from working with you. They will bring in two regulations which will hurt your businesses,” he added.

 

The EU’s CBAM has also been a concern for India. In fact, it was the longest-standing sticking point during New Delhi’s negotiations with Brussels for the FTA.

 

Under the trade deal, India and the EU have also agreed to work together to build capacity in India for CBAM verification, including recognition of Indian verification agencies.

 

India wants to ensure that exporters have sufficient domestic verification capacity to provide the emissions documentation required under CBAM rather than depend on a limited pool of overseas agencies. Additionally, India is working on its Carbon Credit Trading Scheme and discussing carbon pricing with the EU.