The recently finalized Free Trade Agreement (FTA) between India and the European Union (EU) is poised to unlock vast opportunities for India's youth, according to Prime Minister Narendra Modi. The Prime Minister highlighted the agreement's potential to boost the creative economy and generate numerous jobs in sectors like film, gaming, fashion, digital content, music, design, research, and IT. The FTA, hailed as a "historic" and a "game-changer", is expected to significantly benefit Indian startups and the innovation ecosystem.
Speaking at the annual NCC rally in Delhi on Wednesday, January 28, 2026, Prime Minister Modi emphasized the global confidence in India's youth, attributing it to their skills and values. He stated that the FTA is "your freedom to aspire" and that the world is looking at the youth of India with great confidence. He also noted the increase in NCC cadets from 1.4 million to 2 million in recent years, with significant growth in border and coastal areas, reflecting the nation's commitment to its youth.
President Droupadi Murmu also welcomed the FTA, stating that it will provide a strong push for the manufacturing and services sectors, leading to fresh employment opportunities for the country's youth. Addressing a joint session of Parliament, she noted that India's economic foundations have strengthened considerably over the past 11 years and that the country remains the fastest-growing major economy despite global crises.
The FTA is expected to provide unprecedented market access to Indian exporters, with over 99% of Indian exports by value receiving preferential entry into the EU. This is projected to significantly enhance India's export competitiveness, particularly in labor-intensive sectors such as textiles, apparel, leather, footwear, marine products, gems and jewelry, handicrafts, engineering goods, and automobiles. Official estimates suggest that exports worth USD 75.85 billion are poised for accelerated growth, including nearly USD 33 billion in labor-intensive sectors where tariffs of up to 10% will be eliminated upon the agreement's entry into force. The FTA is also expected to create employment opportunities for women, artisans, youth, MSMEs, and professionals.
The agreement includes a carefully designed approach to automobile liberalization through a quota-based system, which will enable EU manufacturers to introduce high-end models in India while also promoting future "Make in India" manufacturing and export opportunities. Reciprocal access will also allow Indian-made automobiles to enter EU markets.
India has ensured the safeguarding of sensitive sectors, particularly agriculture and dairy, with no market access granted for products such as dairy, cereals, poultry, soymeal, and certain fruits and vegetables. At the same time, favorable access has been secured for agricultural and processed food exports, including tea, coffee, spices, fresh fruits, vegetables, and processed foods, which is expected to strengthen rural livelihoods.
The India-EU FTA covers conventional areas such as trade in goods, services, trade remedies, rules of origin, customs and trade facilitation, as well as emerging areas such as SMEs and digital trade. Two crucial pacts on security and defense collaboration and mobility of Indian talents to Europe were also signed. The agreement positions India and the European Union as trusted partners committed to open markets, predictability, and inclusive growth.
