India-EU FTA: Zero Tariffs to Boost Auto, MSME Exports to Europe Market

• The India-EU Free Trade Agreement (FTA) is set to provide significant manufacturing gains for India's auto sector, auto components, and MSMEs.
• The deal, concluded after nearly two decades, will eliminate tariffs on 99% of Indian exports and 97% of EU shipments, offering duty-free access to the European market.
• Made-in-India cars will gain duty-free access to the EU, while India will reduce tariffs on EU cars above ₹25 lakh from 110% to 10% with an annual quota.
• Industry leaders emphasize that the FTA's true impact lies in the scale of opportunity for Indian manufacturing, not just tariff reductions, benefiting labor-intensive sectors like textiles, leather, and chemicals.
• The agreement is expected to transform MSMEs by integrating them into European value chains, lower industrial modernization costs, and attract further European investment into India.

Why It Matters: The India-EU FTA will significantly boost Indian manufacturing, especially autos and MSMEs, through zero-tariff access to Europe.