How the India-EU FTA could impact Indian agriculture?

The India–European Union Free Trade Agreement (FTA), described as one of the biggest trade deals India has signed in decades, will reshape agricultural trade between India and Europe. This article explains what it means for Indian farmers, exporters, markets, and food systems.

What is the India–EU FTA?

The India–EU Free Trade Agreement (FTA) is a trade deal between India and the European Union to make trade easier and more affordable between the two markets. Under this agreement, both sides reduce or remove import duties and other trade barriers. This helps goods move faster and at a lower cost.
For agriculture, it mainly means better export chances for Indian farm products in Europe, but also stricter quality and safety rules to follow. In short, it opens doors for trade, but farmers must meet higher standards to benefit.

What does the India-EU FTA do for Agriculture?

The FTA will cut or eliminate tariffs (taxes on imported or exported goods) on many products between India and the EU. For agriculture, this means both sides open parts of their markets to each other in a more predictable way.

From the European side: India has agreed to reduce barriers on many agri-food products, allowing European agricultural goods such as processed foods and other foods to enter India more easily.

From India’s side: Indian agricultural and processed food products will get preferential access to the EU market, making it easier to export things like tea, coffee, spices, and other value-added foods, often with lower or no duties.

What Indian Farmers Stand to Gain?

Indian farmers could see real benefits if they are ready for export markets.

• Better export opportunities: Easier access to the European Union market can increase demand for Indian tea, spices, coffee, fruits, and more.
• Higher income potential: Export-quality produce often earns better prices than local sales.
• Growth in value-added farming: More focus on processing, grading, and packaging can help farmers earn more from the same crop.
• Improved farming practices: To meet export standards, farmers may adopt cleaner and more efficient production methods.
• Boost to marine and seafood exports: Lower duties in the European Union can increase exports of shrimp, prawns, frozen fish, and other seafood, creating better income opportunities for coastal farmers and fishers.
• Protection for sensitive sectors: Key areas like dairy, poultry, cereals, and some fruits and vegetables are kept out of major tariff cuts, which helps protect small and marginal farmers from cheap imports.
• Support for farmer groups and small exporters: Easier rules and self-certification can help Farmer Producer Organisations (FPOs), cooperatives, and small exporters take part in international trade.
• More investment in storage and logistics: Better export opportunities can attract investment in cold storage, warehouses, and transport, reducing wastage and improving farmer returns.
• Focus on high-value agriculture: The agreement encourages a shift toward high-quality and premium farm products, helping farmers earn more instead of only selling large volumes.

In simple terms, farmers who focus on quality and market demand can use this agreement as a chance to earn more and reach global buyers.

What Farmers Will Need to Do?

1. Meet Strict Quality and Safety Rules: Europe has strong food safety, sanitary, and quality standards. To sell there, Indian producers will have to meet these rules, including traceability (telling exactly where food came from) and limits on chemical residues.

This means Indian exporters and farmers may have to invest in:

• Clean production practices
• Better packaging and testing systems
• Documentation for traceability

That’s good for product quality overall, but it may be harder for small farmers without support.

2. Improve Infrastructure: The success of agricultural exports depends heavily on logistics like cold chains (cool transport and storage), warehouses, and good roads. Without this infrastructure, farmers may not be able to take full advantage of FTA.

Challenges and Risks for Indian Agriculture

The India–EU FTA brings opportunities, but it also raises some concerns for Indian farmers. Understanding these risks is important before expecting big gains.

1. Cheaper European Imports May Increase Competition

When import duties are reduced, some European farm and food products can enter India at lower prices. This may help consumers, but it can create strong competition for Indian producers.

Possible impact on farmers:

• More competition for dairy and processed food producers
• Pressure on local crop and food prices
• Small farmers struggling to compete without quality improvements

2. Sensitive Farm Sectors Have Protection - For Now

India has kept key products like dairy, rice, poultry, and some fruits and vegetables out of major tariff cuts. This reduces the risk of sudden import pressure.
However, experts warn that if these protections change later, low-priced imports could affect small farmers. Past FTA experiences show that large tariff reductions can hurt domestic agriculture if farmers lack support and strong market systems.

3. Benefits May Not Reach All Farmers

Export-ready farmers and large agri businesses are in a better position to gain from the FTA because they already meet quality and logistics requirements.

Small and marginal farmers may face challenges such as:

• Limited access to export markets
• Lack of training in quality standards
• Low investment in storage and transport

Without proper support, many small farmers may not fully benefit from the trade deal.

Industry Perspectives on the India-EU FTA

Voices from industry leaders show how the India-EU FTA is also being seen as a turning point for agri-business, farm machinery, and global trade integration.

Mr. Raman Mittal (Joint Managing Director at ITL (Sonalika & Solis)) said:

Conclusion of India-EU FTA is indeed a landmark moment in shaping one of the largest economic partnerships in the world. It opens space for greater market access, innovation, collaboration and investment flows. The agreement will also pave the way for strong value chain integration, diversified trade and enhanced competitiveness. Congratulations to the Hon’ble Prime Minister Narendra Modi ji and the leadership of the European Union.

As India’s leading tractor export brand with full presence across European markets, we welcome this agreement as a catalyst for deeper collaboration and sustainable growth and remain poised to contribute to a stronger trade integration and innovation.

CNH Industrial Perspective: Implications for India’s Agri Ecosystem

The India–EU Free Trade Agreement (FTA) marks a significant advancement for the agricultural machinery industry, presenting a mutually beneficial opportunity for both regions. For India, the agreement reinforces the country’s position as a global manufacturing and export hub, while enabling deeper technological collaboration with Europe - an important driver for the future of farm mechanisation and industrial growth.

For CNH, the agreement closely aligns with our India strategy, which is built around four key pillars: India for India, India for the world, Global Capability Centre (GCC), and sourcing from India. The FTA creates a favourable environment for Indian-manufactured agricultural equipment, components, and powertrains to become more competitive in European markets, while also enabling advanced European technologies and products to be introduced and scaled in India.

From an industry perspective, the agreement is expected to accelerate the adoption of advanced mechanisation solutions. High-end products such as forage harvesters and higher-horsepower tractors above 120 HP currently have limited penetration in India. These segments are likely to see stronger acceptance as access to technology improves and trade barriers are reduced. This will enable manufacturers to serve a larger and more diverse farmer base, while enhancing productivity, efficiency, and sustainability.

The agreement also underscores India’s growing importance in global manufacturing and sourcing. At CNH, critical engine, driveline, and powertrain components are already produced at our Pune and Greater Noida facilities, supporting both domestic requirements and global supply chains. The FTA further strengthens India’s role by enhancing cost competitiveness and export potential.

Europe remains one of CNH’s largest global markets, and the agreement opens up new opportunities to leverage our strong European portfolio alongside India’s manufacturing and engineering capabilities. Overall, the India–EU FTA is expected to positively impact product access, technology collaboration, and manufacturing scale, reinforcing India’s central role in CNH’s global strategy and the broader agricultural machinery ecosystem.

What Is Tractor Gyan’s Opinion on the India–EU FTA?

The India-EU FTA between India and the European Union can be a positive step for Indian agriculture if farmers are supported properly. It brings export opportunities, but also higher standards and competition. Farmers who focus on quality, value-added crops, and better practices can benefit more. At the same time, small farmers will need guidance, infrastructure, and policy support. According to Tractor Gyan, the deal has potential - but real success depends on how well it works at the ground level for farmers.

Conclusion:

The India-EU FTA opens real opportunities for farmers who can meet export standards and connect to global supply chains. It could help India earn more from agricultural exports and raise rural incomes. But without investment in infrastructure, farmer support, and careful protections for vulnerable sectors, the benefits may not reach all farms equally.