A major trade agreement between India and the European Union has finally taken shape after nearly two decades of talks. The details, shared by The Kobeissi Letter who has 1.3m followers on X, shows just how wide-reaching this deal really is.
It removes tariffs on close to 90% of all goods traded between the two sides and is already being described as one of the largest trade resets in recent years.
At its core, this deal is about access. For European exporters, India becomes far more open than before. For Indian manufacturers, the EU becomes easier to sell into without facing steep entry barriers.
Both sides are clearly trying to reduce their dependence on the U.S. market and build a stronger trade link directly with each other.
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BREAKING: Details of the historic trade deal between India and the EU have emerged:
— The Kobeissi Letter (@KobeissiLetter) January 27, 2026
1. Eliminates tariffs on ~90% of goods trade between EU and India
2. Set to double EU goods exports to India by 2032
3. Tariffs on cars from EU to India cut from 110% to 10%
4. Tariffs on… pic.twitter.com/w3pNvZjaiW
However, one of the most eye-catching changes is in the auto sector. Tariffs on European cars entering India will drop from a massive 110% to just 10%.
That is not a minor adjustment. It completely changes the pricing structure for European brands looking to sell in India, from premium German models to smaller manufacturers across the continent.
The wine industry is also set for a big shift. Import duties on European wines will fall from around 150% to between 20% and 30%. That brings wine into a price range that could finally allow it to move beyond a luxury niche in the Indian market and into something more mainstream for urban consumers.
On the other side, India is gaining serious access to the EU market. Tariffs on Indian jewelry and textiles will be cut to zero, along with furniture, chemicals, leather goods, and metals. This gives Indian exporters a much cleaner path into one of the world’s largest consumer markets, especially in sectors where India is already globally competitive.
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Moreover, TradeWithSanju summed it up neatly, calling it a “mother of all deals” that opens European markets for Indian goods while slashing duties on cars and wine. After 20 years of negotiations, the magnitude of what is being lifted is not easy to ignore.
Historic indeed! 🌍🤝
— TradeWithSanju (@Sanju3999) January 27, 2026
“Mother of all deals” eliminates most tariffs, slashes car & wine duties, and opens EU markets for Indian goods—two decades in the making and a game-changer for global trade. 📈🇮🇳🇪🇺
However, there are still some doubts as to how this will actually play out. One response was whether cars from Europe would actually sell well in India when the country’s GDP per capita is still less than $3,000.
The €17,000 Fiat 500 may still be out of the price range of the average Indian consumer, even if the tariffs are lifted. This is where the problem actually lies.
In response, the United States should walk away from NATO, walk away from Ukraine and no longer sanction Russia. The EU can now handle its own problems.
— Dr. Shawn W. Palmer (@jntsrgn) January 27, 2026
Others chose a more political slant. “This agreement demonstrates that Europe is now ready to move on its own and redefine its alliances. It even goes so far as to say that it may change the U.S. reaction to Europe on NATO, Ukraine, and Russia.” While far-fetched, it illustrates that this agreement is more than simply a trade tale.
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So what European cars made in the EU will Indians purchase, since GDP per capita in India is $2.9k per year?
— Knight Templar USA (@USKnightTemplar) January 27, 2026
And cheapest made in EU car is Fiat 500 what cost $17k. This is almost 6 years of work for the average Indian.
I’m listening. 🤔
However, what is not in question is that this agreement changes the course of trade between India and Europe. It reduces barriers that have protected domestic industries for decades and forces both to compete head-to-head. For the exporter, this means opportunity. For domestic producers, it means pressure.
If the numbers play out as expected, EU goods exports to India could double by 2032. That alone explains why this agreement is getting so much attention.
It is not just about cheaper cars or wine. It is about two huge economies that have decided to get closer to each other in a world that is becoming more and more fragmented every year.
Whether this is going to be a true game-changer or just another ambitious agreement on paper, only time will tell, depending on the pace that companies and consumers take. But one thing is for sure: trade between India and the EU will not be the same again.
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