On January 27th, the European Union and India reached a milestone by concluding negotiations for the most ambitious Free Trade Agreement (FTA) in their history. This treaty not only creates a free trade zone for 2 billion people but also removes the barriers that have historically hindered investment in the world’s fourth-largest economy.

For CFOs and fund managers, India has ceased to be a future promise and has become an immediate strategic necessity. At Auxadi, with over 45 years of experience simplifying international expansion, we are already helping our clients capitalize on this new landscape.

Key facts of the agreement

The agreement directly impacts costs and the ease of entry into the world’s most populous country, with estimated savings of €4 billion annually in customs duties for European companies:

• Historic opening in financial services: India has made unprecedented commitments in this sector, facilitating the integration of accounting, treasury, and international investment processes.
• Drastic tariff reductions:
  • Automotive and machinery: tariffs on automobiles will drop from 110% to 10%, while those on machinery (up to 44%) and pharmaceuticals (11%) will be mostly eliminated.
  • Agri-food sector: the tariff on olive oil will be reduced from 45% to 0% over five years. Wine tariffs will immediately drop from 150% to 75%, with progressive decreases down to 20%.
• Legal certainty and IP: the agreement guarantees a high level of protection for Intellectual Propert -trademarks and trade secrets- bringing Indian legislation closer to EU standards.

The challenge: from political agreement to daily operations

Although the treaty reduces entry costs, India’s internal administrative complexity remains a challenge. As the European Commission has noted, the success of this FTA depends on companies being able to take advantage of it in a practical way.

This is where we at Auxadi provide value. Our technological platform and proven methodology allow your expansion to be seamless across three critical areas:

1. Tax compliance: taking advantage of new tariff benefits requires an accounting structure that masters the Indian Goods and Services Tax (GST) and the new rules of origin.
2. International payroll management: managing talent in one of the world’s largest workforces requires compliance with very specific Indian state regulations.
3. Transfer pricing: adapting a multinational group’s policies to this agreement with India is highly complex in international structures.

A partnership based on trust

As Ursula von der Leyen highlighted after the closing of the agreement in New Delhi, this alliance demonstrates that “rules-based cooperation delivers great results”. At Auxadi, we share that vision: ethics and excellence are the pillars that allow a multinational to succeed in complex jurisdictions.

Is your company ready for the Indian market? If your 2026 roadmap includes taking advantage of this new regulatory framework, we act as an extension of your finance department in over 50 countries.

Request a personalized consultation through our contact form, and let’s prepare your strategy for India together.

At Auxadi, we offer comprehensive services in accounting, tax, payroll, transfer pricing and corporate legal services to multinationals and funds. With experience since 1979 and a presence in over 50 countries, including 26 proprietary subsidiaries, our advanced technological platform, MySPV, and proven methodology enable us to guarantee efficient management in compliance with local regulations. 

Source: ICEX | ‘Acuerdo Comercial UE-India: beneficios para España del Tratado de Libre Comercio UE-India’