ISLAMABAD: India and the European Union have finalized a major trade agreement under which zero tariffs will be applied to 96 percent of traded products.
The India–European Union Free Trade Agreement was signed in New Delhi at the India-EU Summit held on January 27, 2026. The leaders of both sides, including Indian Prime Minister Narendra Modi and senior European Union officials, formalised the landmark trade pact.
According to international media, the deal grants near-zero tariff access to key Indian export sectors, including textiles, leather goods, jewellery, chemicals, and seafood.
These product categories overlap significantly with Pakistan’s export basket to the European Union. In the previous year, Pakistan’s exports to the EU stood at approximately $8.8 billion, with textiles and apparel forming a major share.
Trade experts warn that the India–EU agreement could intensify competition in the European market and potentially affect Pakistan’s exporters, particularly if Indian products gain price advantages due to reduced or eliminated tariffs.
The development has raised concerns within Pakistan’s export-oriented industries, which already face challenges related to costs, compliance requirements, and market access.
Analysts suggest that Pakistan may need to pursue trade diversification, enhance competitiveness, and strengthen engagement with the European Union to mitigate the potential impact of the India–EU trade deal on its exports.
