After nearly two decades of negotiations, the European Union and India have concluded a landmark Free Trade Agreement that is set to reshape economic and technological cooperation between two of the world’s largest markets. Beyond tariff reductions and trade volumes, the agreement carries major implications for technology, digital services, innovation, and research collaboration.
As global supply chains evolve and digital economies accelerate, the EU India FTA positions both regions as long term partners in building resilient, competitive and innovation driven tech ecosystems.
A strategic agreement with global relevance
The agreement removes or reduces tariffs on the vast majority of goods and services traded between the EU and India. India will gradually lower duties on most European exports, while the EU will provide near total tariff free access for Indian products. This broad economic opening is expected to significantly expand bilateral trade and investment flows over the coming decade.
However, the real strategic value of the deal lies in services, technology and innovation. These sectors are now central to economic growth, competitiveness and national security for both sides.
Digital services and IT gain improved market access
Technology and digital services are among the biggest beneficiaries of the agreement. India’s globally competitive IT and software services sector will gain improved access to European markets, supporting expansion in areas such as cloud services, enterprise software, data analytics, cybersecurity and digital consulting.
For European technology companies, the FTA opens new opportunities in India’s fast growing digital economy. European firms operating in software, hardware, fintech, health tech and industrial technology can now scale more easily in a market that is rapidly adopting digital platforms across both public and private sectors.
Reduced regulatory friction and clearer market access rules are expected to encourage cross border partnerships, joint ventures and long term investment.
Strengthening cooperation through the Trade and Technology Council
The EU India Trade and Technology Council provides a dedicated framework to align strategic priorities in emerging technologies. Through this mechanism, both sides are working together on artificial intelligence, semiconductors, high performance computing, trusted digital infrastructure and interoperability standards.
Long before the FTA concluded, the EU-India Trade and Technology Council (TTC) was established as a joint mechanism to coordinate cooperation on strategic emerging technologies. The second TTC meeting in 2025 highlighted shared priorities in:
- Artificial intelligence (AI): Cooperating on ethical AI, research frameworks and large language model development.
- Semiconductors and high-performance computing: Exploring joint research, resilient supply chains and future chip design efforts.
- Digital public infrastructure and interoperability: Aligning platforms to ensure secure connectivity, digital governance and cross-border data flows.
The Free Trade Agreement strengthens this cooperation by creating economic incentives for joint research, product development and commercial deployment. This alignment is particularly important as governments seek to balance innovation with regulation in areas such as AI governance and data protection.
Semiconductors and electronics manufacturing opportunities
Semiconductors and electronics represent a critical area of cooperation. India is investing heavily in domestic chip manufacturing and electronics assembly, while Europe is seeking to reinforce its semiconductor supply chains through public and private investment.
Under the FTA, reduced tariffs and improved investment conditions make it easier for European firms to participate in India’s electronics and semiconductor ambitions. At the same time, Indian manufacturers gain better access to European markets for finished products and components.
This cooperation supports supply chain resilience, reduces over reliance on single regions, and encourages shared innovation across design, manufacturing and testing.
Talent mobility and skills exchange
Access to skilled talent is one of the defining challenges facing technology companies globally. The EU India FTA includes provisions that support professional mobility, making it easier for engineers, IT specialists and researchers to work across borders.
Improved mobility enables deeper collaboration between companies, startups and research institutions. It also helps address skills shortages in critical technology fields, while supporting knowledge transfer and long term workforce development.
Research, innovation and startup collaboration
The EU and India already have a strong track record of cooperation in research and innovation. Joint programmes have supported projects in areas such as artificial intelligence, digital health, clean technology and smart infrastructure.
The Free Trade Agreement reinforces these efforts by making collaboration more commercially viable. Startups and scaleups benefit from clearer pathways to international markets, access to funding, and stronger links between research and industry.
This environment encourages innovation that can scale globally rather than remaining confined to domestic markets.
Benefits for India’s technology ecosystem
For India, the agreement supports its ambition to move further up the global technology value chain. Expanded access to European markets strengthens export opportunities for IT services, software products and electronics.
European countries benefit from increased exports of machinery, medical devices, avionics and advanced manufacturing technologies to India. European tech firms also gain from:
- A deeper customer base in one of the fastest-growing digital economies.
- New R&D collaboration opportunities with Indian partners.
- Stronger tech supply chains that reduce dependence on a single region.
- Shared standards and governance frameworks that make it easier to scale products internationally.
The deal also helps attract European investment into Indian technology hubs, supporting job creation, skills development and infrastructure growth. By aligning with European standards and practices, Indian tech companies can improve global competitiveness.
Advantages for Europe’s tech sector
European technology companies gain access to one of the world’s fastest growing digital markets. The agreement supports exports of advanced machinery, industrial software, medical technology and digital platforms.
In addition, collaboration with Indian firms and research institutions enhances innovation capacity and supports more resilient supply chains. For Europe, the deal also reinforces strategic autonomy by diversifying trade and technology partnerships.
A long term partnership for digital growth
The EU India Free Trade Agreement marks a shift from transactional trade towards a deeper strategic partnership. By integrating trade, technology and innovation policy, both regions are better positioned to respond to global competition and technological change.
As implementation progresses, the real impact of the agreement will be seen in new products, shared research, growing startups and stronger digital infrastructure across Europe and India. For the global tech sector, this partnership signals a more connected and collaborative future.