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New Free Trade Agreement Between the EU and India

General

Kerstin Kolvenbach Published: 2/2/2026

What Does the EU–India Free Trade Agreement Offer?

The new free trade agreement is a major step forward for economic cooperation—and especially promising for the machinery and industrial equipment sector. Negotiations were concluded on January 27, 2026. After legal review, translation, signing, and ratification, it will come into force.

The direction is clear: trade between the EU and India will grow, and both markets will be better integrated. According to Handelsblatt, Europe’s GDP could increase by up to €22 billion every year as a result.

Why Is India in Focus Right Now?

India is now the world’s fourth-largest economy and the EU’s ninth-biggest trading partner, with a yearly GDP of €3.4 trillion and a population of 1.45 billion. One quarter of India's GDP comes from its industrial sector. (Source: European Union)

In 2024, EU exports to India reached €75 billion (nearly €49 billion goods, €26 billion services). EU investments in India stand at around €140 billion, supporting 800,000 jobs in Europe.

Over 2,000 German companies already operate in India—especially machinery, automotive, electrical engineering, construction, textile, chemicals, and energy. According to the German-Indian Chamber of Commerce, small and medium-sized enterprises (SMEs) make up 90% of current market entry inquiries. India is both a sales market and a key location for new supply chains and production. (Source: Produktion)

What Does This Mean for Companies in Service, Installation, and International Projects?

The agreement will sharply reduce—or even eliminate—tariffs on many industrial goods.

Machinery and equipment manufacturers, in particular, will benefit. Import and export processes will be much faster, with less red tape. Technical standards and certifications will be mutually recognized, making it easier to ship components and complete units without lengthy paperwork.

For service, installation, and commissioning work, many time-consuming formalities—such as temporary work permits and urgent spare part logistics—will be removed. This means companies can respond more flexibly to urgent needs like unplanned production stoppages.

German suppliers become more attractive to Indian customers, as overall costs drop and investment decisions are made faster. Key industries include automotive, chemicals, textiles, pharmaceuticals, and food—where German technology and service are highly valued.

Key Negotiation Points:

Major Tariff Cuts:
96.6% of EU goods exports to India will see tariffs removed or reduced—potential savings: up to €4 billion per year.

Planned Tariff Reductions:

Machinery/electric equipment: from up to 44% down to 0% on most products
Chemicals: from up to 22% down to 0% on most products
Pharmaceuticals: 11% down to 0%
Cars: gradually from 110% down to 10% (with quotas)

Less Bureaucracy:

Simplified customs, more transparency, and faster clearance make imports and exports easier to plan.

Better Protection for Know-how and Brands:

Improved enforcement of intellectual property rights—brands, designs, trade secrets.

Services and SMEs Welcome:

Priority market access for European service providers in defined sectors; SME contact points and better information access.

(Source: European Union)

Growth & Success Stories

Many German companies are already thriving in India, some for decades. SMEs like Amann & Söhne, Dürr Dental, or Spohn & Burkhardt have opened new factories, offices, and technical centers in recent years. This means building new teams, training service staff, and professionalizing international coordination.

The trend: Companies who understand local needs, prioritize quality, and offer flexible service win business—even with price-sensitive buyers. Building and managing skilled teams remains a challenge—especially as these markets grow.
(Source: Produktion)

Opportunities: Speed, Access, Better Services

This agreement makes it easier for companies to expand into India—especially into industrial clusters like Pune, Bangalore, and Chennai. Service and maintenance assignments are simpler, with less bureaucracy, and investing in local service or assembly units is more profitable.

Market Access: It’s easier to sell production lines and automation tech, especially for SMEs. Lower hurdles mean faster market entry and more dynamism.
Service Growth: After-sales and maintenance work can be organized faster and with fewer bottlenecks. More projects in growth industries are now within reach.
Local Investment: Building local plants or service teams is more attractive and pays off faster, with fewer regulatory and tax obstacles. Planning for maintenance and troubleshooting is easier.

Challenges: More Coordination, Greater Complexity

New markets mean new challenges: managing supply chains and teams across locations and time zones, while keeping quality and costs under control. More orders and new customers require more than just great products—for smooth operations, companies need transparent, streamlined processes.

Greater Complexity: More countries, more dependencies, more stakeholders, and deadlines.
Need for Transparency: Old systems like paper, Excel, or outdated software won’t scale. Risks of delays and quality issues increase.
Local Regulations: India remains a market with its own rules, standards, language barriers, and bureaucracy.
Skills Shortages: Finding skilled staff—especially for international projects—gets more challenging as volumes rise. Training, compliance, and documentation are key.
Price Sensitivity: Indian buyers negotiate fiercely—yet quality, flexibility, and reliable service matter more than ever.

How fieldux Helps You Win

This is where fieldux comes in. Our Field Service Management Platform helps machinery and equipment companies stay ahead of change and manage complexity.

With centralized deployment planning, mobile job management, and full transparency on materials, spare parts, and team qualifications, you always have control—even as project volumes rise. You run your service business efficiently, without overload—building a foundation for scalable, reliable after-sales service.

The more international your business, the greater the need for standardized, digital workflows in service and installation. fieldux brings all service and installation processes together in one platform—making you competitive in India.

Centralized planning & scheduling

Get a complete view of teams, qualifications, certificates, availability, travel, project phases—all in one planner.

Mobile job management

Checklists, approvals, photos, digital reports, and customer sign-off—all on your smartphone or tablet, even offline.

Full transparency on tools, spare parts, and materials

Resource planning means everything is at the right place, right time.

Real-time status & project reporting

Track progress, open points, risks, and chat with field teams instantly.

Multi-site coordination

See all workload changes. Teams can work across sites, balancing resources and avoiding bottlenecks.

Time zone management

Smart scheduling handles time zones, making global coordination easy.

What to Expect: Strong Predictions—But Implementation Matters

Expectations are high, forecasts are positive, and efficiency gains are real. Whether companies realize these benefits depends on how well the agreement is implemented and how quickly European firms adapt.

Success will depend on clear processes, scalable operations, and proactive action.

Conclusion

The EU–India trade agreement injects new momentum into machinery and industrial equipment sectors. It opens market access, lowers costs, and makes international projects more attractive. Companies who organize their service and installation processes proactively and adapt to new requirements will gain the most—turning risks into opportunities.

Those who prepare now will be ready to thrive as trusted partners in India’s dynamic growth market.

Practice will tell—but those who are ready stand to benefit most.

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