India’s New Trade Strategy: Why European Businesses Are Paying Attention in 2026

India’s trade strategy has entered a new phase. After years of cautious negotiations, India is now building a network of high-value bilateral trade agreements focused not only on tariff reduction, but also on investment, resilient supply chains, technology partnerships, and professional mobility.

For European businesses, this shift is particularly significant. The India–EU Free Trade Agreement, concluded in January 2026, is expected to become one of India’s most commercially significant economic partnerships and one of the EU’s largest trade agreements globally. The agreement reflects a broader strategic alignment between Europe and India around trade, manufacturing, technology, energy transition, and supply-chain diversification.

This momentum was reinforced during Prime Minister Narendra Modi’s address at the European Round Table for Industry (ERT) in Gothenburg, Sweden, in May 2026. Speaking to European business leaders alongside European Commission President Ursula von der Leyen and Swedish Prime Minister Ulf Kristersson, Modi described the India–EU FTA as a “transformative economic partnership” and invited European companies to expand investments in clean energy, semiconductors, logistics, AI, and advanced manufacturing.

For Europe, India increasingly represents a long-term manufacturing and sourcing alternative, access to one of the world’s fastest-growing major markets, and a strategic partner in industrial and technology cooperation. For India, the agreement is expected to improve access to European markets, investment, technology, and global value chains.

At the same time, the agreement is likely to reshape competitive dynamics on both sides. European firms may gain stronger access to Indian sectors such as automotive, industrial machinery, and premium consumer products, while European industries may face increased competition from Indian exporters in pharmaceuticals, engineering goods, IT services, and manufacturing.

India–EFTA TEPA: A New Investment-Led Trade Model

The India–EFTA Trade and Economic Partnership Agreement (TEPA) with Switzerland, Norway, Iceland, and Liechtenstein entered into force in 2025 and marked a major milestone in India’s trade policy.

The agreement includes a long-term USD 100 billion investment commitment linked to employment generation and advanced manufacturing, with expected investments across sectors such as clean energy, industrial technology, pharmaceuticals, machinery, and precision manufacturing.

For many European investors, the agreement is viewed as an important indicator of India’s increasing openness to deeper economic integration with Europe.

India–UK Trade Agreement Expands Services and Manufacturing Opportunities

India’s trade agreement with the United Kingdom further strengthens opportunities in services, manufacturing, and professional mobility.

The agreement improves market access across several sectors while also facilitating easier movement for professionals, consultants, engineers, and technology specialists.

Industries expected to benefit include:

• IT and digital services
• Financial and professional services
• Textiles and apparel
• Engineering goods
• Automotive components
• Consumer products

The agreement also supports broader collaboration in innovation, education, fintech, and clean technologies.

India–Oman CEPA Strengthens Gulf Connectivity

Beyond Europe, India is also strengthening trade connectivity with the Gulf region through the India–Oman Comprehensive Economic Partnership Agreement (CEPA), signed in late 2025.

The agreement improves India’s access to Middle Eastern markets while creating opportunities for European firms using India as a manufacturing and export base into the Gulf and Africa.

The CEPA provides preferential or duty-free access across a wide range of sectors, including:

• Pharmaceuticals and healthcare
• Engineering products
• Textiles and apparel
• Food processing
• Gems and jewellery

The agreement also supports deeper logistics, maritime, and supply-chain cooperation between India and the Gulf region.

What This Means for European Companies

India’s evolving trade framework offers more than tariff reductions - it provides a platform for long-term participation in one of the world’s fastest-growing major economies.

European companies are increasingly evaluating India as:

• a manufacturing and sourcing destination,
• a regional export platform,
• a technology and R&D partner,
• and a strategic market for long-term expansion.

At the same time, companies entering India must balance opportunity with operational realities, including regulatory navigation, local competition, compliance requirements, and the need for strong local partnerships.

Businesses that understand both the opportunities and complexities of India’s evolving trade landscape are likely to be better positioned as India deepens its economic integration with Europe and global markets.

How Can Expandys Help?

With its local presence and experienced team, Expandys helps businesses navigate India’s evolving trade landscape and identify practical growth opportunities linked to new trade agreements and investment trends.

Expandys supports companies through:

• Market entry strategy
• Industry and competitor analysis
• Business development support
• Supply-chain and sourcing guidance
• Trade fair representation
• Partner and distributor identification

As India strengthens its economic partnerships with Europe and the wider global economy, businesses that move early may benefit from stronger positioning in one of the world’s most dynamic growth markets.

Disclaimer: The information in this article is intended for general guidance only and should not be considered legal, tax, or professional advice.