India and EU to Grant Each Other ‘Most Favoured Nation’ Status for…

Sarah J · 2026-03-06T17:05:04.000Z

India and the European Union have agreed to grant each other Most Favoured Nation (MFN) status for a period of five years as part of their upcoming India-EU Free Trade Agreement (FTA), according to a draft of the deal. The provision will ensure that neither side offers better tariff or trade conditions to other partners during this period once the agreement comes into force. The MFN clause is designed to create a predictable and stable trading framework between the two economies. Under this arrangement, both India and the EU will extend the same favourable trade conditions such as reduced tariffs and improved market access to each other that they offer to their most preferred trading partners. The broader trade agreement aims to significantly expand bilateral commerce by reducing or eliminating tariffs on approximately 96.6% of traded goods by value. The EU expects the deal to potentially double its exports to India by 2032 while saving European companies around €4 billion annually in duties. However, several sensitive agricultural sectors including dairy, rice, sugar, soy, and beef have been excluded from the agreement to protect domestic industries. Both sides also plan to align food safety and certification processes with global standards to streamline trade and accelerate customs clearances. Beyond goods trade, the draft pact includes commitments to strengthen cooperation in digital trade, customs procedures, and regulatory standards. The agreement also promotes paperless trade, legal recognition of electronic contracts, and a secure online environment for cross-border digital commerce. The development marks another milestone in the strengthening strategic partnership between India and the EU, following the conclusion of the long-negotiated free trade agreement earlier in 2026. The deal is expected to deepen economic integration between the two regions and create new opportunities for businesses, investors, and exporters on both sides.

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India and EU to Grant Each Other ‘Most Favoured Nation’ Status for… | SEINET