India and the European Union have completed the legal scrubbing of their free trade agreement, marking a significant milestone in the negotiations process. According to reports from PTI, ANI, and Informist Media, a senior commerce ministry official confirmed on Thursday, August 20, 2026, that "the legal scrubbing is done. It has now gone for translation." The completion was officially announced on January 27, with the deal described as the "mother of all deals" between the two economic blocs. Signing is expected by the end of 2026 and implementation is likely in the first half of 2027, as reported by Business Standard. Commerce Minister Piyush Goyal had said last month that the India-EU free trade deal is likely to take effect from the March quarter, while Lithuania's Ambassador to India Diana Mickevičienė expressed optimism that the agreement would come into force during Lithuania's EU presidency running from January to June 2027.
The completed agreement provides substantial market access benefits with tariff concessions on over 95% of the value of exports for both sides. As reported by Informist Media, 93% of Indian exports will enjoy duty-free access to the 27-nation European Union market under the concluded negotiations. The deal also includes provisions for less expensive imports of luxury cars and wines from the EU, creating a balanced trade framework between the two economic blocs. This comprehensive access structure ensures that the majority of Indian shipments will benefit from preferential treatment in the European market, with the agreement specifically designed to double bilateral trade by 2032. The India-EU FTA is described as a "big step" for European and Finnish companies that will make it easier for them to enter the Indian market, as noted by Business Standard.
Finnish companies are looking to expand their India presence from next year onwards following the implementation of the India-EU FTA, according to Business Standard. "Starting next year, there will be more and more Finnish companies coming to the Indian market," said Antti Herlevi, Counsellor for Trade and Investments at the Embassy of Finland in New Delhi. However, India's push for domestic manufacturing could pose challenges for some high-end Finnish products that are difficult to manufacture locally. As Herlevi explained, "Some of the high-end products manufactured in Finland and Europe are difficult to sell in India because they cost a little more. India is price-sensitive. Then manufacturing facilities in Finland are more developed, so it is not easy to start manufacturing in India. At the same time, India is pushing 'Make in India', so there are barriers there." The interest among Finnish companies in investing in India has increased following the trade deal, though the cost competitiveness of Finnish products and difficulty of replicating sophisticated European manufacturing capabilities remain challenges.
The latest trade figures demonstrate the substantial economic relationship between India and the EU, with India-EU trade worth nearly $139 billion in 2025-26 (April-March), up 9.5% from the previous period. India's exports to the European Union were valued at ₹6.4 lakh crore (USD 75.85 billion), while imports stood at ₹5.1 lakh crore (USD 60.68 billion). Additionally, trade in services between India and the European Union reached ₹7.2 lakh crore (USD 83.10 billion) in 2024. During Finnish President Alexander Stubb's visit to India in March, the two countries set a target of doubling bilateral trade by 2030, with India and Finland having bilateral trade of $1.69 billion in 2025-26 (FY26), which included $1.14 billion in imports from the European nation. Finland sees significant potential for expanding bilateral trade with India in sustainability and circular-economy solutions, as well as the maritime, information and communication technology (ICT), and space sectors, as reported by Business Standard.
A key challenge in finalizing the agreement has been the EU's Carbon Border Adjustment Mechanism (CBAM), which came into effect on January 1, 2026. Under this mechanism, the EU imposes carbon charges on imports of goods such as steel, aluminium, fertilizer and cement, with charges currently applicable to steel and aluminium products. As reported by Informist Media, both sides have agreed to set up a technical group to help Indian industry access the EU market smoothly amid the carbon regulation. The commerce ministry held a technical session on Tuesday to sensitize exporters to the CBAM framework, including calculating embedded emissions, data collection, and reporting requirements. Finland could potentially support Indian exporters in meeting the EU's sustainability-related requirements, including those under the CBAM and the bloc's deforestation regulation, as noted by Business Standard.
