Opinion India-EU FTA restores trust in rules-based trade order
The task ahead is clear: Replicate this success, restore the credibility of the WTO, and embed resilience into global supply chains
As the ICC continues to champion open markets and responsible trade, this agreement offers renewed confidence that the principles of the rules-based order remain viable. The conclusion of the India-EU FTA marks a pivotal moment in the trajectory of global commerce. More than a bilateral accord, it is a reaffirmation of the relevance of a rules-based trade order at a time when international trade faces unprecedented strain. Multilateralism is weakened, dispute settlement mechanisms are paralysed, and supply chains are disrupted by geopolitical tensions. The FTA demonstrates that constructive engagement and adherence to international norms remain not only possible but indispensable. It serves as a template for how nations can negotiate complex trade deals while upholding the integrity of the global trading system. It has been described as the “mother of all deals”; just as mothers nurture, guide, and set standards for others to follow, this accord is poised to shape the future of trade.
The agreement underscores the capacity of two major economies — together accounting for about 25 per cent of global GDP, one-third of global trade and a combined market of 2 billion people — to reach a consensus while respecting domestic sensitivities. India’s agricultural red lines were safeguarded, while the EU maintained its stance on CBAM. The numbers tell their own story. Bilateral merchandise trade stood at $136.54 billion in 2024-25, with India exporting $75.85 billion to the EU. The FTA is expected to unlock $75 billion in fresh exports, including $33 billion in labour-intensive sectors. Similarly, the tariff cuts offered by India will save €4 billion per year in duties on EU products. The FTA is a reminder that trade must be anchored in rules, ensuring stability for businesses, workers, and consumers alike.
Of even greater significance is the harmonisation of standards. Product safety and environmental requirements often determine market access more decisively than tariffs. While the burden of tariffs can be absorbed or passed on, non-compliance with standards can shut out trade completely. By aligning specifications, the FTA ensures market access is governed by predictability rather than arbitrary barriers. The agreement also helps to diversify trade flows, reducing overdependence on any single corridor and enhancing resilience. It creates a de-risked $136 billion trade corridor between two reform-oriented economies, linking India’s fast-growing $4.1 trillion market with the EU’s integrated $21.5 trillion economy.
For the International Chamber of Commerce (ICC), this approach resonates deeply. Through initiatives such as the ICC Compact for Trade, Growth and Jobs, we have consistently advocated for agreements that expand opportunity while safeguarding the principles of fairness and sustainability. The FTA embodies this vision: Liberalisation accompanied by safeguards, market access paired with sustainability, and economic integration without compromising sovereignty. The agreement also arrives at a critical juncture for the WTO, ahead of the upcoming 14th Ministerial Conference (MC14) in March. The EU has reiterated that WTO reforms should be based on predictability, fairness and flexibility. With the paralysis of the WTO’s Appellate Body undermining the credibility of dispute settlement, the FTA serves as a reminder that bilateral and regional accords can reinforce the principles of predictability and fairness even as multilateral reform remains urgent. A crucial feature is its reinforcement of dispute settlement mechanisms. By embedding clear procedures for resolving disagreements, it reduces the risk of arbitrary measures and enhances investor confidence. Effective enforcement is not a technical detail — it is the cornerstone of trust in the trading system.
As the ICC continues to champion open markets and responsible trade, this agreement offers renewed confidence that the principles of the rules-based order remain viable. It proves that when nations commit to the rules-based order, they unlock opportunities that benefit businesses, workers, and consumers across continents. The task ahead is clear: Replicate this success, restore the credibility of the WTO, and embed resilience into global supply chains. Only then can trade continue to serve as a driver of growth, stability, and inclusive prosperity.
The writer is first vice chair, International Chamber of Commerce (ICC), Paris, and director, J K Organisation
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