India’s trade strategy has entered a transformative new phase in 2026. After years of cautious negotiations, India has concluded a landmark Free Trade Agreement with the European Union, ratified investment-led partnerships with EFTA nations, and signed new trade deals with the UK and Oman — building one of the most extensive bilateral trade networks of any major emerging economy. For European businesses, this shift signals expanded market access, new manufacturing opportunities, and a deepening strategic alignment that goes far beyond tariff reduction.
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 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.
The India–EFTA Trade and Economic Partnership Agreement (TEPA) — concluded with Switzerland, Norway, Iceland, and Liechtenstein — entered into force in 2025 and marked a major milestone in India’s trade policy. It is one of the first major agreements to tie trade access directly to investment commitments and job creation.
Key features of the India–EFTA TEPA include:
• A long-term USD 100 billion investment commitment linked to employment generation and advanced manufacturing
• Priority sectors: clean energy, industrial technology, pharmaceuticals, machinery, and precision manufacturing
• Improved market access for EFTA goods and Indian services
• Strengthened intellectual property and dispute resolution frameworks
For many European investors, the TEPA is viewed as an important indicator of India’s increasing openness to deeper economic integration with Europe — and a model for future agreements.
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 facilitating easier movement for professionals, consultants, engineers, and technology specialists.
Sectors expected to benefit from the India–UK trade agreement:
• 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 — positioning India and the UK as long-term technology partners, not just trading counterparts.
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. For European companies already using India as a manufacturing base, this agreement opens additional export routes into the Middle East and Africa.
Sectors covered under the India–Oman CEPA include:
• Pharmaceuticals and healthcare
• Engineering products
• Textiles and apparel
• Food processing
• Gems and jewellery
The CEPA also supports deeper logistics, maritime, and supply-chain cooperation between India and the Gulf region — making India an increasingly attractive regional export platform.
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 across four strategic roles:
• Manufacturing and sourcing destination — competitive costs, skilled labour, and policy incentives under PLI schemes
• Regional export platform — using India as a hub to serve Gulf, African, and Southeast Asian markets
• Technology and R&D partner — joint ventures, innovation centres, and digital services collaboration
• Strategic growth market — India’s 1.4 billion consumer base and expanding middle class
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. Early movers with a clear market entry strategy are likely to hold a competitive advantage as trade liberalisation deepens.
These questions address common searches related to India’s trade strategy and European business opportunities in 2026.
In 2026, India’s trade strategy centres on building a network of high-value bilateral agreements focused on investment, technology, supply chain resilience, and professional mobility — not just tariff reduction. Key milestones include the India–EU FTA (January 2026), the India–EFTA TEPA (2025), the India–UK FTA, and the India–Oman CEPA (2025).
The India–EU Free Trade Agreement, concluded in January 2026, gives European firms improved access to Indian markets in sectors such as automotive, industrial machinery, and premium consumer goods. It also opens opportunities for joint ventures in clean energy, semiconductors, and AI. At the same time, European industries in pharmaceuticals and IT services may face increased competition from Indian exporters.
Sectors that stand to benefit most include: clean energy and green manufacturing, pharmaceuticals and healthcare, IT and digital services, engineering goods and automotive components, financial and professional services, and logistics and supply chain infrastructure.
Yes — India is increasingly attractive as a manufacturing base due to its competitive labour costs, government incentives (PLI schemes), and improved trade connectivity with Europe, the Gulf, and the UK. The India–EFTA TEPA’s USD 100 billion investment commitment is an indicator of growing confidence from European investors.
European companies typically enter India through market entry strategies that include partner and distributor identification, joint ventures, representative offices, or wholly-owned subsidiaries. Specialist advisory firms like Expandys help businesses navigate India’s regulatory environment and identify opportunities aligned with new trade frameworks.
With its local presence and experienced team, Expandys helps European 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 and feasibility assessment
• Industry and competitor analysis
• Business development and sales 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.
Download our comprehensive PDF resource, 🔗 India Trade Strategy 2026: The European Business Guide.