India-EU FTA Set to Boost Services, Digital Trade, and Skilled Worker Mobility
In a landmark move poised to reshape economic ties, India and the European Union have officially entered into a Free Trade Agreement (FTA). This agreement, finalized on January 27, 2026, after nearly two decades of negotiations, is expected to significantly boost services, digital trade, and the mobility of skilled workers between the two regions. The EU's executive branch has described the accord as the "mother of all deals," highlighting its potential impact on as many as two billion people.
The FTA aims to eliminate duties on a significant portion of India's chemical export basket, potentially enhancing competitiveness across various sectors. Indian IT firms stand to gain greater market access and legal certainty for cross-border operations, opening doors to opportunities in areas like Artificial Intelligence, clean technology, and Research and Development partnerships.
A key component of the agreement is a framework designed to ease talent movement and support social security arrangements. The FTA establishes regulations for the temporary entry and stay of professionals, including business visitors, intra-corporate transferees, contractual service suppliers, and independent professionals. This mobility framework is intended to solidify India's position as a global talent hub. It is designed to ease the movement of employees, along with their spouses and dependents, of Indian corporations established within the EU, across all service sectors. For businesses aiming to provide services to EU clients under contract, India can access 37 sub-sectors including IT, business, and professional services. Independent professionals looking to offer services to EU clients will have certainty in 17 sub-sectors, including IT, R&D, and higher education, creating expanded opportunities for Indian professionals.
Alongside the FTA, India and the EU have signed a Mobility and Migration Partnership Agreement. Under this pact, all 27 EU member states are committed to offering multi-year, multi-entry visas without numerical caps for Indian students who complete recognized degrees in Europe. Graduates will be eligible for post-study work permits lasting up to three years, while researchers can expect fast-track residence permits and streamlined rules for family reunification. A quota of 25,000 permits annually will be available for seasonally-employed workers in agriculture and hospitality. The agreement also establishes an intra-corporate-transferee route for Indian companies posting staff to EU branches for up to five years.
To facilitate the process, a Legal Gateway Office is set to open in New Delhi to advise Indian applicants and monitor compliance. The agreement aims to address Europe's skills shortages while preventing irregular migration.
The India-EU FTA is expected to provide a major boost to India's labor-intensive sectors like textiles, apparel, leather, footwear, marine products, gems and jewelry, handicrafts, engineering goods, and automobiles. The agreement will bring down tariffs up to 10% on almost 33 billion USD of exports to zero upon its entry into force. The FTA is also expected to open new opportunities for Micro, Small and Medium Enterprises (MSMEs) and create jobs for women, artisans, youth, and professionals.
The agreement is anticipated to enhance trade in services through certainty of market access, non-discriminatory treatment, a focus on digitally delivered services, and ease of mobility. Broader and deeper commitments have been secured from the EU across 144 service subsectors, including IT/ITeS, professional services, education, and other business services.
