India EU Agree On 5-Year Most Favoured Nation Trade Deal
India and the European Union have reached agreement on a five-year Most Favoured Nation (MFN) status arrangement, according to a draft trade deal aimed at bolstering bilateral economic relations and reducing trade barriers between the partners.
India EU Most Favoured Nation Agreement
Under the draft agreement, India and the European Union will grant each other Most Favoured Nation status for a period of five years. The MFN status ensures that neither side imposes discriminatory tariffs or trade restrictions on the other compared with third-party countries. The deal is expected to enhance market access for goods and services between India and the EU, promoting a more favourable trade environment.
Officials from both sides have described the draft arrangement as a key milestone in negotiating a comprehensive trade and investment pact, signalling mutual intent to strengthen economic ties and deepen cooperation across sectors.
Trade Deal Draft Highlights Market Access
The draft trade deal outlines provisions related to tariff commitments, dispute-settlement mechanisms, and regulatory cooperation. Granting MFN status is intended to level the playing field for exporters and importers by ensuring fair treatment in tariff application and trade facilitation. Economic analysts say the arrangement could improve competitiveness for Indian goods in European markets and for European products in India, enhancing bilateral trade flows.
The draft also includes discussions on reducing non-tariff barriers, technical standards alignment, and streamlined customs procedures, although final terms are still subject to negotiation.
Strategic India EU Economic Relationship
The agreement on MFN status comes amid broader efforts to negotiate a full-fledged India-EU Free Trade Agreement (FTA). While substantial differences remain on issues such as agricultural market access and service sector commitments, the MFN pact is seen as a confidence-building step. Both sides have reiterated commitment to continuing negotiations in pursuit of a deeper economic partnership that supports mutual growth, investment and job creation.
