The Federation of European Business in India (FEBI) has welcomed the conclusion of the EU–India Free Trade Agreement (FTA) following the 16th EU–India Summit in New Delhi, describing the pact as a major turning point for one of the world’s most significant economic partnerships.
In an official statement issued on 27 January, Sonia Prashar, Secretary General of FEBI, said the agreement represents a landmark step in deepening trade, investment and industrial cooperation between India and the European Union at a time of heightened global economic uncertainty.
A partnership spanning two billion consumers
FEBI underlined the scale of the economic bloc created by the agreement, noting that India and the EU together represent a combined market of nearly two billion people and close to one-quarter of global GDP.
Bilateral trade in goods and services already stands at approximately €190 billion, and the industry body said the FTA provides a long-term, rules-based framework to unlock the next phase of growth in commerce, cross-border investment and industrial collaboration.
According to FEBI, such predictability is increasingly valuable as companies navigate supply-chain restructuring, geopolitical risks and shifting global trade patterns.
India emerges as a central pillar of EU trade strategy
From the standpoint of European companies operating in India, the agreement reflects a structural shift that has been building over the past decade.
Citing its Business Sentiment Survey 2026, FEBI said India remains among the world’s fastest-growing major economies, with GDP growth projected to exceed 7.3% in 2026.
The survey also found that India has become the European Union’s largest trading partner, with bilateral trade in goods reaching around €120 billion in FY2024, representing growth of nearly 60% over the past decade.
Investment trends point in the same direction. Nearly 67% of EU foreign direct investment into India has taken place in the last ten years, while more than 95% of European companies surveyed said they plan to expand their operations in India over the next five years.
FEBI said these figures highlight India’s evolution from a high-growth consumer market into a strategic base for manufacturing, technology development and regional operations.
Manufacturing and global capability centres in focus
The FTA is widely expected to act as a catalyst for new capital deployment and job creation across multiple sectors.
According to the survey data:
- 75% of EU businesses expect higher investment following the agreement
- 78% anticipate increased employment
- 69% plan to expand manufacturing operations in India
- 37% intend to scale up Global Capability Centres
FEBI said the emphasis on manufacturing and capability centres reflects India’s growing role in global value chains, particularly in engineering, automotive components, pharmaceuticals, chemicals, digital services and industrial technology.
Implementation key to unlocking gains
While welcoming the agreement, the European business body cautioned that the scale of economic benefits will depend heavily on execution.
It called for effective implementation to ensure that improved market access, smoother regulatory compliance and deeper supply-chain integration translate into sustained investment flows, productivity gains and quality job creation.
According to FEBI, practical reforms in customs procedures, standards harmonisation and dispute-resolution mechanisms will be critical in converting the FTA’s legal framework into tangible business outcomes.
Strategic signal beyond economics
Beyond its immediate commercial impact, FEBI described the agreement as a broader strategic signal by both partners.
It said the conclusion of the FTA reflects a shared intent by India and the European Union to strengthen trade and industrial cooperation at a time when global economic governance is under strain from geopolitical tensions, protectionism and technological disruption.
The agreement, the organisation added, provides a stable and predictable long-term framework for businesses on both sides to plan investments and partnerships with greater confidence.
