India-EU FTA vs. EVFTA: A Comparative Look at Their Strategic Impact on EU Business Expansion

The recent conclusion of the India-EU Free Trade Agreement (FTA) marks a significant milestone in the European Union’s strategic engagement with key Asian economies. In parallel, the EU’s evolving partnership with Vietnam under the EU-Vietnam Free Trade Agreement (EVFTA) shows a dual approach to enhancing trade relations in the Indo-Pacific.

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Alongside the successful conclusion of negotiations on a comprehensive Free Trade Agreement (FTA) with India on January 27, 2026, the European Union (EU) has continued to deepen its engagement in the Indo-Pacific, most notably through the upgrade of its relationship with Vietnam to a Comprehensive Strategic Partnership (CSP) on January 1.

The two major developments in global trade, occurring just days apart, demonstrate the EU’s sustained commitment to promoting sustainable and prosperous trade relations in the Indo-Pacific, a region it identifies as “a key player in shaping the international order.”

While negotiations on the India-EU FTA formally concluded on January 27, 2026, the agreement has now entered the legal scrubbing phase, during which technical texts are finalized and aligned across languages. This process is expected to take several months, followed by signature and ratification procedures across the EU and India – meaning full entry into force is still some distance away.

In contrast, the EU-Vietnam Free Trade Agreement (EVFTA) has been operational since August 2020, offering EU companies a proven framework with established tariff reductions, regulatory mechanisms, and real-world implementation experience. In fact, the EVFTA has been a proven engine of EU-Vietnam trade expansion, generating nearly US$300 billion in bilateral trade over five years and making Vietnam the EU’s top trading partner in ASEAN, according to EuroCham.

See also: India-EU FTA Concluded: FAQs on the ‘Mother of All Deals’

EU trade strategies in the Indo-Pacific: How the India-EU FTA and EVFTA complement each other

While the India-EU FTA creates one of the world’s largest integrated trade zones – spanning nearly two billion people – the EU’s parallel trade initiatives in Southeast Asia are designed to deepen economic engagement across some of the region’s fastest-growing and most interconnected markets.

Following Singapore in 2019, Vietnam became the second ASEAN member to conclude a free trade agreement with the EU, underlining its role as a pivotal regional partner. More recently, in September last year, the EU and Indonesia finalized a Comprehensive Economic Partnership Agreement (CEPA) after nine years of negotiations.

As the EU-Vietnam Free Trade Agreement (EVFTA) marked its five-year anniversary in August 2025, bilateral trade in the first 11 months of that year surpassed US$66.8 billion, reflecting a 6.6 percent year-on-year increase.

Taken together, these developments illustrate the EU’s broader Indo-Pacific strategy: anchoring its regional footprint through deep, rules-based trade partnerships with key economies across South and Southeast Asia. This institutional approach via trade frameworks is intended to strengthen supply chain resilience, support economic diversification, and reinforce the EU’s position as a normative trade actor in the region.

FTAs like these matter, but their impact is uneven. Some sectors see clear gains, others see little change. The sensible approach is to look at your own product mix, your supply chain, and your target market, then judge where the agreement actually shifts your position. The policy story and the commercial reality are not always the same” – Dan Martin, Co-head of Business Intelligence, Dezan Shira & Associates

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Against this backdrop, the India-EU FTA and the EVFTA exemplify how complementary trade pathways can offer diversified entry points for EU businesses expanding into Asian markets. While both agreements aim to enhance market access, reduce trade barriers, and deepen economic ties, they differ materially in structure, depth of liberalization, and regulatory ambition.

A comparative view of these FTAs highlights how the EU has tailored its trade strategy to distinct partners – balancing differences in development levels, market scale, and geopolitical considerations – while advancing a coherent regional economic agenda.

See also: How Vietnam and India Complement Each Other

Key differences between the EVFTA and the India-EU FTA: Strategic business lens

In practical terms, the EVFTA offers immediate operational advantages for EU companies today, while the India-EU FTA represents a longer-horizon strategic play – requiring early planning now to capture first-mover advantages once ratification is complete” – Melissa Cyrill, Asia Briefing

Comparing scope and market access

EVFTA

The EVFTA is one of the EU’s most ambitious trade agreements with a developing economy. Under the agreement, over 99 percent of tariffs between the EU and Vietnam are eliminated, with most duties phased out over seven to 10 years. Liberalization is deliberately asymmetric, reflecting Vietnam’s development status and allowing longer transition periods for sensitive sectors. On the day the EVFTA came into effect, 65 percent of tariffs on EU goods into Vietnam were removed, with phased elimination of nearly all remaining duties, facilitating trade and lowering costs for EU exporters.

Certain agricultural products, including rice and sugar, remain subject to tariff rate quotas or transitional protections. Nevertheless, the overall scope of tariff elimination has significantly improved bilateral market access, particularly for EU industrial exports and Vietnamese manufactured and agricultural goods.

India-EU FTA

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Under the India-EU FTA, the EU will eliminate duties immediately on around 70.4 percent of tariff lines, covering nearly 90.7 percent of India’s export value, with a further 20.3 percent of products subject to phased liberalization. In total, EU concessions span almost 97 percent of tariff lines and over 99 percent of trade value.

Meanwhile, India has taken a calibrated liberalization approach, granting immediate duty-free access on around 49.6 percent of tariff lines, covering 30.6 percent of trade value, while a further 39.5 percent of tariff lines, representing 63.1 percent of trade value, will be liberalized in phases over 5, 7, or 10 years from the agreement’s entry into force. Overall, India’s offer spans approximately 92.1 percent of tariff lines and 97.5 percent of trade value, reflecting a balanced strategy that expands market access while safeguarding sensitive sectors. Three percent of products are under phased tariff reductions, and a few products are subject to tariff rate quotas for apples, pears, peaches, and kiwi fruit.

Trade in goods and regulatory facilitation

EVFTA

Beyond tariff elimination, the EVFTA includes detailed provisions to facilitate trade in goods by reducing non-tariff barriers. The key measures include:

• Streamlined sanitary and phytosanitary (SPS) rules, with Vietnam recognizing the EU as a single entity, applying regionalization for plant and animal diseases, and allowing pre-listing of establishments to speed up approvals for agricultural exports.
• Targeted sector facilitation, notably in automotive products, including recognition of the EU whole vehicle certificate of conformity, five years after entry into force.
• Simplified trade procedures, covering customs, import and export licensing, and acceptance of the “Made in EU” origin marking for non-agricultural goods, reflecting deeper EU market integration.

India-EU FTA

The India-EU FTA places strong emphasis on customs cooperation and regulatory facilitation to reduce non-tariff barriers and improve trade predictability. Key provisions include:

• Enhanced customs and trade facilitation, with commitments on transparency, advance rulings, simplified procedures, and expedited release of goods to reduce administrative burdens for legitimate traders.
• Future-proof customs cooperation, establishing a legal basis for deeper collaboration on supply chain security, customs data exchange, and risk management, strengthening border controls while facilitating trade flows.
• Comprehensive SPS framework, introducing clear timelines and procedures for import approvals, audits, regionalization of plant and animal health measures, and listing of establishments, improving predictability for agri-food and fisheries trade while fully preserving the EU’s stringent SPS standards.
• Robust technical barriers to trade (TBT) disciplines, incorporating the World Trade Organization’s (WTO) TBT commitments and extending them through enhanced transparency, mandatory public consultations, transition periods for new regulations, and a dedicated Working Group on conformity assessment to address regulatory alignment issues, including India’s Quality Control Orders (QCOs).

See also: India–EU FTA Luxury Auto Impact: Tariff Cuts, Quotas & Market Access

Services, investment, and the digital economy

EVFTA

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Under the EVFTA, Vietnam has committed to significantly improving market access for EU companies across a wide range of services sectors, including business and environmental services, postal and courier services, banking and insurance, and maritime transport. These commitments go beyond Vietnam’s previous access regimes and are reinforced by a forward-looking clause that allows the favorable outcomes of other trade agreements currently under negotiation to be incorporated into the EVFTA.

Complementing services liberalization, Vietnam has also pledged to further open its manufacturing sector to EU investment, particularly in food and beverage processing, fertilizers and nitrogen compounds, tires and tubes, plastic and rubber products, ceramics, and construction materials – strengthening the agreement’s role in supporting long-term industrial and supply-chain integration.

Investment protections and market access commitments enhance predictability for EU companies entering or expanding operations in Vietnam.

India-EU FTA

Services liberalization in the India-EU FTA advances in several ways. The agreement entails:

• Adopting and enforcing most rules from the WTO Domestic Regulation Joint Initiative, of which India is not a member.
• Establishing a framework similar to the Understanding on Commitments in Financial Services, which India did not adopt in GATS.
• Introducing explicit commitments on senior management, boards of directors, and local presence, marking new ground for India.
• Providing greater clarity and enforceability for India’s commitments.
• Incorporating provisions on professional mobility, aligned with the most ambitious commitments previously made by each party.

A notable feature is the inclusion of digital trade provisions addressing consumer protection, cross-border data flows, and safeguards against forced disclosure of source code. The agreement also establishes frameworks for competition policy, SME cooperation, regulatory transparency, and structured regulatory dialogue.

See also: Financial Services Annex under India-EU FTA: Key Details Here

Intellectual property and geographical indications

EVFTA

Intellectual property (IP) protection is a cornerstone of the EVFTA. Vietnam recognizes and protects 169 EU geographical indications (GIs), strengthening brand protection for European agricultural and food products. At the same time, selected Vietnamese GIs, such as those for coffee and tea, are protected within the EU market, supporting Vietnam’s agricultural exports and regional branding efforts.

Regarding intellectual property rights, Vietnam has committed to a level of protection that exceeds WTO Trade-Related Aspects of Intellectual Property Rights (TRIPS) standards. This agreement enhances the protection of EU innovations, artworks, and brands against unauthorized copying by strengthening enforcement measures. The EU pharmaceutical industry notably benefits from improved protection of test data and the option to extend patent terms by up to two years in the event of delays in marketing authorization.

India-EU FTA

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The EU and India have reached an agreement on the effective protection and enforcement of IP rights. The IP chapter aims to:

• Promote innovation and creativity both in India and the EU;
• Facilitate the trade of innovative and creative goods and services between the two regions; and
• Reduce trade barriers and encourage investments to support a more sustainable and inclusive economy.

The deal ensures a high level of IP rights protection and enforcement according to Indian and EU laws. It encompasses various categories, including:

• Copyright and related rights;
• Trademarks;
• Designs;
• Trade secrets and undisclosed information protection; and
• Plant varieties.

A detailed section on IP rights enforcement describes the measures, procedures, and remedies each Party must implement to ensure effective protection of intellectual property rights. Additionally, the IP chapter requires both Parties to adhere to relevant international IP agreements.

Sustainable development and regulatory commitments

EVFTA

The EVFTA contains a robust Trade and Sustainable Development (TSD) chapter. Commitments cover labor rights, environmental protection, and adherence to core International Labour Organization (ILO) conventions and multilateral environmental agreements.

Civil society monitoring mechanisms are embedded in the agreement, reinforcing transparency and accountability in implementation.

India-EU FTA

The India-EU FTA also incorporates TSD commitments, including labor standards, environmental cooperation, and gender equality. Complementing these are Good Regulatory Practices chapter and transparency provisions aimed at improving regulatory predictability and governance quality across sectors.

Dispute settlement and institutional frameworks

EVFTA

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The EVFTA introduces a dispute settlement mechanism that is generally regarded as more efficient than the WTO system, incorporating formal consultations, mediation, and structured timelines.

Institutionally, the agreement establishes joint committees and specialized bodies to oversee implementation, regulatory dialogue, and public procurement access.

India-EU FTA

Dispute settlement under the India-EU FTA is more formalized, featuring binding arbitration panels and enforcement through the suspension of concessions if rulings are not complied with.

The agreement establishes multiple institutional layers, including Joint Committees and Specialized Committees, as well as rapid response mechanisms to address emerging trade concerns.

Takeaway for businesses

Together, the EVFTA and the India-EU FTA illustrate the EU’s differentiated trade strategy in Asia, combining ambitious market access with regulatory depth, while adapting to partner-specific economic and political realities. For Vietnam, the EVFTA has reinforced its position as a manufacturing and export hub closely aligned with EU standards. For India, the agreement signals deeper integration with European markets, particularly in services and digital trade.

Understanding these differences is essential for businesses assessing market entry, supply chain restructuring, and long-term investment strategies across South and Southeast Asia.

A gap we often see is around procedures rather than tariffs. Import approvals, standards, licensing steps, and documentation can quietly shape timelines and costs. Companies that map these early tend to face fewer surprises once trade starts flowing” – Dan Martin, Co-head of Business Intelligence, Dezan Shira & Associates

See also: The EVFTA: Key Advantages and Business Perceptions

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