The European Union and India signed a free trade agreement and, unlike the bloc’s deal with South America’s Mercosur, it has not trigger protests or backlash from European farmers.
Under the India agreement signed yesterday, industry representatives say sensitive products are protected, trade gains are concentrated and direct competition in the most vulnerable agricultural sectors is avoided.
Agricultural organisations welcomed the deal.
Koen De Leus, chief economist at BNP Paribas Fortis, told Brussels Signal today that it was a positive move “because in agriculture the most sensitive parts such as milk and dairy products are excluded”.
“Rice, sugar and beef are also not included in the agreement,” he added.
Those exclusions, he said, fundamentally changed how EU farmers view the deal.
Trade in goods between the EU and India amounts to around €120 billion, with services accounting for about €60 billion. The agreement is expected to remove tariffs on about 90 per cent of exchanges.
By comparison, EU trade with Mercosur totals around €100 billion in goods and €42 billion in services but with agriculture playing a far more central and politically sensitive role.
“India cannot afford to fully open its agricultural market,” De Leus said. “More than 40 per cent of employment in India is still in agriculture. Opening that market to European farmers, who are far more productive, would be disastrous and lead to massive unemployment.”
That constraint on the Indian side translates into protection on the European side. Sensitive farm sectors remain shielded while liberalisation is directed elsewhere.
Copa-Cogeca, one of the EU’s main farmers’ organisations, welcomed the approach, saying the agreement “clearly recognises the need to protect the most sensitive sectors of European agriculture and its production model”.
“India represents a market of 1.45 billion consumers with considerable untapped potential for EU agri-food exports,” it said, pointing to tariff reductions on products such as processed foods, olive oil, fruit juices, wine and spirits.
The group also stressed that any Indian agri-food products entering the EU would still have to comply with Europe’s strict health, safety and food standards, a longstanding demand of farmers’ groups.
“The exclusion of the most sensitive products from liberalisation, including beef, sugar, rice, poultry and honey, demonstrates a pragmatic and responsible approach,” it said.
That structure marks a clear departure from Mercosur, where liberalisation targets precisely the sectors European farmers consider most vulnerable. In South America, beef, poultry and sugar are major export strengths, a key reason that deal sparked opposition.
Both had been negotiated over at least 20 years, with Mercosur talks lasting longer.
Although the European Commission signed that agreement during a visit to South America, the European Parliament immediately referred it to the European Court of Justice.
Farmers’ organisations across the EU opposed the deal, warning it would expose them to competition from large-scale agricultural exporters and weaken farming standards.
Economic scale also shapes the debate. India and Mercosur differ sharply in size, growth prospects and strategic weight.
“The growth potential is higher in India, which increases the possible impact of the trade agreement,” Ruben Dewitte, senior economist at ING Belgium, told Brussels Signal today.
India’s population of around 1.45 billion dwarfs Mercosur’s approximately 270 million and, from a strategic perspective, Dewitte added, India’s geographic position near China also makes it a more significant long-term partner for the EU.
Model simulations by the Kiel Institute for the World Economy show that deeper EU-India integration could boost bilateral trade by 41 per cent to 65 per cent, expand supply chains and raise incomes on both sides, reinforcing the logic of opening less sensitive sectors first.
Dewitte added that both agreements remove or reduce tariffs on more than 90 per cent of tariff lines but that headline figure masks key differences.
“Politically, we can mainly expect import growth in less sensitive sectors such as IT services, chemicals and textiles,” he said of the EU-India deal. “Sensitive European agricultural sectors remain protected.”
That design has limited resistance from farmers but has not silenced political criticism. Belgian Green MEP Saskia Bricmont questioned the broader direction of EU trade policy.
“It is incomprehensible to conclude, on the one hand, a partnership with a state that does business with Putin’s Russia, while on the other hand we legitimately support Ukraine,” she wrote.
“Over the past three years, a third of India’s oil imports came from Russia, which contributed to financing its war in Ukraine,” Bricmont said.
India has also deepened co-operation with Russia beyond trade. The two countries are discussing defence production, labour mobility and long-term economic co-ordination, while discounted Russian oil has remained a significant part of India’s energy supply despite western sanctions.
Bricmont compared the agreement to an “agriculture-for-cars” logic, where sensitive sectors are protected to secure industrial gains. She warned the India deal risked becoming an “Ukraine-for-cars” trade-off.
She added that the EU is expanding market access for European industries while downplaying India’s ties with Moscow at a time when Brussels is seeking to isolate Russia economically over the war in Ukraine.
