EU-India trade agreement: what food & beverage businesses need to know

EU–India trade agreement: substantial tariff cuts with safeguards for sensitive agri‑food

Shortly after the Council of the European Union approved the signing of the EU–Mercosur agreements, the EU and India reached political agreement on their own comprehensive trade deal, setting the stage for significant tariff cuts and new market openings, particularly for agri‑food and processed food.

Key takeaways for the food sector:

• Tariff relief across core agri food lines (e.g. wine, olive oil and processed foods), with phased reductions or eliminations from currently high rates.
• Sensitive EU agricultural products remain protected (e.g., beef, sugar, rice, chicken meat), supported by a bilateral safeguard mechanism to respond to market disruption linked to the agreement.
• EU health and food safety standards continue to apply in full to imports under the deal; the EU is reinforcing audits and border controls.

1. Context and scope

Following the Council’s recent decision to sign the EU–Mercosur agreements, the EU has now concluded negotiations with India on what is described as the most ambitious market opening India has granted to any partner to date. The deal aims to lower or remove customs duties and reduce non‑tariff barriers to boost trade in goods and services between the EU and India.

2. From autos to agri‑food: The EU–India trade agreement lowers barriers and maintains key safeguards

The EU–India agreement is a comprehensive trade deal designed to increase exchanges in goods and services by lowering or removing customs duties and reducing non‑tariff barriers. It delivers significant openings across major industrial and food sectors, ranging from automobiles and machinery to chemicals, pharmaceuticals and agri‑food, while preserving protection for the EU’s most sensitive agricultural products and establishing a bilateral safeguard mechanism to address market disruptions arising directly from the agreement. This alert focuses on the implications for the food and beverage sector.

3. Market access: food and agri-food highlights

India’s current tariffs on agri‑food products are steep, averaging over 36%, with peaks of up to 150%. The agreement substantially reduces or eliminates these duties for many EU products, opening a sizeable consumer market. Illustrative outcomes include:

• Wine: tariff cut from 150% upon entry into force to 75%, then reduced to 20% for premium ranges and 30% for medium ranges.
• Olive oil and certain vegetable oils: phased to 0% within five years.
• Processed foods (e.g. breads, pastries, biscuits, pasta, chocolate and pet food): duty-free treatment (0%), replacing current tariffs of up to 50%.
• Fruit juices and non‑alcoholic beer: reduced to 0%.
• Beer: reduced from 110% to 50%.
• Spirits: capped at 40%, down from up to 150%.
• Sheep meat: reduced to 0%.

In parallel, the EU and India are negotiating a stand‑alone agreement on geographical indications (GIs) to curb imitation and improve market recognition for traditional EU products.

4. Protection of sensitive sectors and safeguards

The agreement excludes several sensitive EU agricultural products from liberalisation, including beef, sugar, rice, chicken meat, milk powder, honey, bananas, soft wheat, garlic and ethanol. At the same time, the EU foresees carefully calibrated tariff‑rate quotas for a limited set of imports, including sheep and goat meat, sweetcorn, grapes, cucumbers, dried onions, as well as specific products such as rum made from molasses and starches. In addition, the agreement contains a bilateral safeguard mechanism that may be triggered to address market disturbances attributable to the agreement.

5. Food safety and compliance remain paramount

The EU’s stringent, science‑based rules on food, animal and plant health continue to apply without change to imports under the agreement. The EU is increasing food safety audits in third countries and strengthening border controls for food, animal and plant products.

6. What the food industry should watch

Companies should assess how their specific product categories are treated under the agreement, in particular the tariff levels applicable upon entry into force, the timing of any phased reductions and, where relevant, differentiated tariff structures such as those foreseen for premium and medium‑range wine. A clear understanding of these schedules is key to aligning pricing strategies with the gradual reduction of duties.

Businesses also should monitor the treatment of sensitive EU agricultural products, which are excluded from liberalisation, as well as the introduction of limited and product‑specific import quotas for certain agri‑food products, including sheep and goat meat, selected vegetables and fruit and specific processed products such as rum made from molasses and starches. Attention should also be paid to any activation of the bilateral safeguard mechanism, which is designed to provide a targeted response in the event of market disruptions arising directly from the agreement.

In parallel, companies should follow developments in the stand‑alone EU–India arrangement on geographical indications, which seeks to enhance protection for traditional EU food and drink products in India, as well as the EU’s reinforcement of health and food safety controls on imported products. Products placed on the EU market must continue to comply with all applicable EU requirements, including obligations relating to traceability, documentation and quality assurance.

7. Practical steps for companies

Pricing & contracts: Companies may consider reflecting the scheduled tariff reductions in their contractual arrangements, taking into account potential quota frameworks and the possibility of temporary adjustments should duties fluctuate during the implementation phase.

Customs readiness: To benefit from preferential treatment as soon as the agreement enters into force, companies should ensure that all required documentation, in particular proof of origin and related compliance materials, is prepared in advance.

Compliance & quality assurance: Businesses should maintain robust food safety and quality assurance systems aligned with EU requirements, including appropriate documentation, supplier controls and readiness to meet reinforced border and audit procedures.

Market strategy: Exporters may wish to prioritise product categories that benefit most from tariff reductions, such as olive oil, processed foods or beverages, and consider how differentiated tariff outcomes may influence market positioning.

Brand protection: Companies whose products are expected to benefit from the separate EU–India GI arrangement should monitor its progress and prepare to leverage enhanced protection for distinctive EU food and beverage products in the Indian market.

8. Next steps and expected timeline

The next procedural steps will begin with the European Union publishing the negotiated draft texts of the agreement in the near future. These documents will then undergo a comprehensive legal review, during which they will be refined and translated into all official EU languages. Following this process, the European Commission will submit its proposal for the signature and conclusion of the agreement to the Council of the European Union. Once adopted by the Council, the EU and India will be able to sign the agreement. Once signed, the agreement will still require the consent of the European Parliament as well as a concluding decision by the Council of the European Union. It can only enter into force once India has completed its own ratification process, ensuring that both parties have fulfilled all necessary legal and institutional requirements.