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    The EU-India FTA is coming — prepare your business for tariff-free trade

    Machinery & Industrial Equipment

    Up to 44% tariff elimination — half immediately, the rest phased over 5–10 years

    India's machinery and industrial equipment sector has quietly become one of the most consequential trade corridors with Europe. At roughly €11 billion in bilateral trade, it covers everything from CNC machine tools and hydraulic presses to industrial valves, pumps, and textile machinery. Indian manufacturers — particularly those clustered around Pune, Chennai, Coimbatore, and Rajkot — have moved well past basic fabrication. Many now produce to ISO 9001 and CE standards as a matter of course, and a growing number hold VDE or TÜV certifications for the German market specifically.

    The India-EU Free Trade Agreement is set to reshape this corridor substantially. Up to 44% of tariff lines covering industrial machinery will see duties eliminated, with roughly half dropping to zero immediately upon entry into force and the remainder phased out over 5 to 10 years. For Indian exporters, this actually closes a long-standing price gap against Chinese and Turkish competitors who've had preferential access. For European buyers — especially the Mittelstand firms in Germany and mid-sized OEMs across Italy and France — it opens up a supplier base that combines competitive pricing with genuine engineering capability.

    We're also seeing structural shifts that favour this corridor. European manufacturers are actively diversifying supply chains away from single-country dependence, and India's Production Linked Incentive (PLI) scheme for capital goods is pulling in fresh investment. The combination of tariff relief and capacity expansion should push bilateral machinery trade past €14 billion within five years, provided exporters stay on top of the compliance requirements — which, in the EU, are not getting any simpler.

    Sector at a Glance

    Bilateral Trade Value

    ~€11B

    Growth Rate

    +6.2% CAGR

    Indian Exporters (approx.)

    ~8,500

    Key Production Clusters

    PuneChennaiAhmedabadCoimbatoreRajkot