The EU and India have announced the completion of negotiations on a major trade agreement after almost two decades of discussions. From a practical point of view, it is not slogans that are important for business, but the mathematics of market access: India is aiming to reduce or eliminate tariffs on 96.6% of EU exports by value over several years, and the EU — on 99.5% of Indian exports by value with accelerated relief in a number of "labor-intensive" categories.
For Indian exporters, the promise of a "quick effect" is strongest in the areas where the tariff is the difference between a contract and a lost tender: textiles, shoes, tea/coffee, and some consumer goods. For European imports to India, cars are a key marker: a trajectory has been announced to reduce duties from extremely high levels to 10% under a quota of up to 250,000 vehicles per year, which can rebuild supply chains for automotive components and finished machines, and at the same time boost demand for Ro—Ro/container services and warehouse handling.
A separate "red flag" for foreign trade services is the carbon agenda. According to international agencies, the CBAM (carbon adjustment at the EU border) mechanism has not been canceled in the framework of the deal, which means that for Indian steel/cement supplies, the issue is shifting from the "duty or zero" plane to the plane of carbon reporting and cost. This is not only the customs rate, but also data on the production chain, verification and the risk of adjustments at the border.
Why is this deal “about logistics” and not just about tariffs
There is a hidden fork in the dry percentages of liberalization: the winner is the one who scales physical delivery and documents faster. In practice, this means an increase in demand for:
- classification and origin (rules of origin) — so that preferences are not "eaten up" by errors in certificates;
- contract logistics and warehouses for European labeling, traceability and returns requirements;
- repackaging/deferred assembly (postponement) closer to the sales market in order to flexibly manage the assortment while gradually reducing rates.
The deal is superimposed on the real "weather" in ports: recent industry reviews record congestion and site density in Northern Europe (including Rotterdam and Hamburg) and increased container delays in Singapore. This means a simple thing: even if tariffs are reduced according to schedule, the cost of delivery and deadlines can "eat up" part of the benefits — and merchants will begin to reorient themselves to windows with better reliability of schedules, and not just the freight price.
How will it affect the BRICS: India strengthens its negotiating position
For India, as one of the key BRICS participants, the agreement with the EU is not a reversal of the BRICS, but an expansion of the field of maneuver. The more alternative markets a country has, the more stable exports are in the face of sanctions risks, tariff wars, and fluctuations in demand. In logistics, this often manifests itself as follows: companies build multicore chains (part of the volume is through European hubs, part through the Middle East/Southeast Asia) in order not to depend on one route and one regulatory framework.
Practical checklist for importers and exporters
- Right now, prepare HS codes, origin, and the chain of materials — preferences like accuracy.
- Budget carbon compliance for high-risk industries (metal, cement, chemicals).
- Plan warehouses and buffer stocks, taking into account the congestion of Northern European hubs — "bottlenecks" may become more expensive than duties.
- Keep an eye on the ratification and the entry calendar along the lines — the first winners are those who pick up demand in the "starting windows" of rate cuts.
The key conclusion is that this agreement is not about one beautiful date, but about several years of reconfiguration of foreign economic activity — from tariffs and quotas to data, port infrastructure and risk management.
