India-EU trade agreement: Its success will be determined by the harder part that comes next

The same goes for the India-EU free trade agreement (FTA), labelled the “mother of all deals," now that leaders have announced the successful conclusion of negotiations. The enthusiasm is understandable. The pact is economically weighty. It reportedly envisages phased tariff reductions across a large share of bilateral goods trade, frameworks for regulatory cooperation, disciplines on sustainability and supply-chain resilience and standing institutional mechanisms to manage standards and technical barriers.

For India, it promises improved access to a high-income market for pharmaceuticals, engineering goods, automotive components, textiles and apparel, processed foods and specialty chemicals—sectors where EU demand is large but regulatory thresholds exacting.

For the EU, the deal opens wider opportunities for automobile and auto-component makers, renewable-energy developers, wines and spirits producers, machinery firms, luxury brands and infrastructure operators seeking scale in a fast-growing market. Linking two blocs that together account for roughly a quarter of global output, it is among the most consequential bilateral trade initiatives of recent years.

Yet, attention will soon shift from celebratory communiqués to administrative reality. The history of trade diplomacy is sobering: many FTAs hailed as transformative delivered far less than promised because implementation lagged ambition. If India and the EU want this pact to be an engine of durable integration, they will have to treat execution as a strategic project in its own right.

Few agreements will be more technically demanding. The EU has the world’s most sophisticated regulatory framework, with dense rules covering chemicals, food safety, data protection, carbon accounting, sustainability reporting, labour processes and product liability. India, on its part, is a continental-scale market with multiple regulatory layers across central ministries, state governments, port authorities, customs zones and sectoral regulators. Bridging these systems will take more than just parliamentary approval.

For Indian exporters, the biggest hurdles will often lie not in tariffs, but in conformity assessments, certification timelines, traceability requirements and documentation standards. EU companies expanding or investing in India face a mirror image: land acquisition rules, sub-national regulations, environmental clearances, tax administration, etc. If such frictions persist, preferential tariffs will only partially offset them.

What separates successful trade partnerships from mediocre ones is the institutional machinery that follows signature. Several priorities stand out. We will need infrastructure related to standards: testing labs, accreditation bodies and certification agencies. Rules of origin will be another critical area. If compliance is too burdensome, firms will not use preferences.

Sustainability rules, carbon-border measures, data governance and chemicals regulation evolve continuously. Joint working groups that keep pace with these shifts will determine whether firms adapt smoothly or confront disruptions. Finally, there will be trade frictions. But these must be resolved through technical consultations between regulators and not via arbitration panels.

Industry, too, has homework to do. Indian firms must upgrade compliance systems, invest in traceability, adopt digital documentation and treat regulatory excellence as a competitive asset rather than an imposition. Large businesses may manage this readily, but smaller exporters may struggle unless supported by export-promotion councils, chambers of commerce and public schemes.

How the pact is executed will shape perceptions of India’s wider trade strategy. After years of caution, New Delhi has shown an inclination to open its market, albeit in phases. If this deal delivers visible export growth, investment inflows and supply-chain integration, it will strengthen the case for further liberalization through other deals. If not, scepticism will return quickly.

Whether Indian pharma and textile firms gain durable footholds in Europe, whether engineering exporters plug into continental supply chains and whether European clean-energy companies, machinery producers and automakers translate market opening into long-term investment in India will not be decided by the FTA. It will be determined in certification laboratories, port terminals, regulatory offices, state secretariats and corporate compliance departments.

The stakes for Europe are equally high. Brussels increasingly views trade agreements as a way to diversify partners, secure clean-energy supply chains and embed sustainability norms abroad. That agenda cannot be realized through legal texts alone; it demands years of technocratic engagement.

The India-EU FTA now enters its harder phase. Success will be measured in shipment volumes, clearance times, investment decisions and factory expansions. If both sides treat implementation as secondary to diplomacy, the deal will underperform. But if they treat it as a flagship economic-governance project, it could become one of the most consequential trade partnerships of this decade. The applause will soon subside. That is when the real work must begin.

The author is president, Chintan Research Foundation and former Director, World Trade Organization.