Commerce Minister Piyush Goyal defended the newly concluded India-EU free trade agreement against domestic criticism, emphasizing its benefits for economic growth. The deal addresses key issues like carbon tariffs and mobility for professionals. However, US Treasury Secretary Scott Bessent expressed disappointment, accusing Europe of prioritizing trade over support for Ukraine.
India and the European Union finalized a long-delayed free trade agreement (FTA) on January 27, 2026, aimed at boosting bilateral trade and reducing the bloc's reliance on the United States amid rising global trade tensions. Commerce and Industry Minister Piyush Goyal defended the pact against criticism from the Congress party, emphasizing economic opportunities and mutual benefits. He described it as a strategic win-win partnership that supports growth and job creation.
The Congress raised concerns over the deal's impact on domestic industries and regulatory challenges, but Goyal rebutted, calling it "sour grapes." The agreement addresses the contentious Carbon Border Adjustment Mechanism (CBAM), with agreements on a technical working group for visibility on carbon footprint measurements and support for India's decarbonisation efforts. The EU agreed to accredit Indian verifiers and extend any CBAM flexibility granted to other countries to India. One source said, "We have kept it as a living dialogue so that any other measure arising [in future] can be taken on board."
Mobility arrangements are a key outcome, including intra-corporate transfers across all services sectors for three years (extendable by two), covering spouses and dependents. Provisions apply to 37 sectors for contractual service suppliers and 17 for independent professionals, including IT and business services. Student mobility is unrestricted, with post-study work opportunities. The EU committed around $500 million for the first two years to help reduce Indian industries' carbon footprint through technical assistance, technology, and funding.
However, US Treasury Secretary Scott Bessent expressed disappointment on January 28, stating Europe had put trade ahead of Ukrainian interests by buying refined products from India made with sanctioned Russian oil. He told CNBC, "I find the Europeans very disappointing." The deal is expected to eliminate or reduce tariffs on 96.6% of traded goods by value, saving European companies €4 billion ($4.8 billion) in duties by 2032. Both sides are committed to expediting signing and ratification after legal scrubbing.
