New Delhi is closer to Warsaw: How will Polish companies benefit from the EU’s strategic alliance with India?
For years the EU and India sought to work out a comprehensive trade agreement. The first round of negotiations was launched in 2007, but talks broke off in 2013 when the parties failed to agree on key regulatory areas, particularly involving the automotive sector. After an impasse of nearly a decade, negotiations on a free-trade agreement were resumed in 2022 and completed on 27 January 2026 in New Delhi.
The main aim of the free-trade agreement (FTA) is gradual liberalisation of trade in goods between the parties by lifting tariffs. But the agreement goes much further. The final text of the agreement has not been officially released yet, but it is clear that the agreement is one of the most important legal instruments in recent years under the EU’s common trade policy. In a statement with Indian prime minister Narendra Modi, European Commission president Ursula von der Leyen called the agreement “the mother of all deals.” The EU–India FTA creates a shared market representing nearly 25% of global GDP and over two billion people.
The growth in economic cooperation between the EU and India is an ongoing trend. Currently the EU is India’s largest trading partner. Over the last decade the value of trade in goods between these markets has grown by nearly 90%, reaching EUR 120 billion in 2024, accounting for 11.5% of India’s total trade in goods . An equally striking growth trend can be seen in the trade in services, which nearly doubled from EUR 30.4 billion in 2020 to EUR 59.7 billion in 2023. The EU is also the biggest source of capital for India in the form of foreign direct investment. Finalisation of the trade deal is part of this trend. It is also undoubtedly politically significant, in light of the growing rivalry with China and the fickle tariff policies of the United States. Following the recent closing of a trade deal with the Mercosur countries in South America (which we covered on the portal In Principle), this is the next step in the EU’s strategy of diversifying supply chains.
What does the agreement provide?
The main points of the deal involve relaxing the rules for commercial exchange, primarily reduction of tariffs. According to the European Commission, 90% of current tariffs between the parties will be eliminated or reduced, opening up the Indian market to such European goods as chemicals, textiles, ceramics, cosmetics and machinery. The automotive industry has high hopes for the FTA. India is currently the world’s third-largest automotive market in terms of sales, behind the US and China. The aim of the agreement is to gradually cut Indian import duties on European cars from 110% to just 10%. For the first five years the reduction will not apply to electric vehicles. On the other hand, tariffs on car parts will be lifted entirely over a period of 5–10 years.
The agreement will also reduce or eliminate tariffs on agri-food products, which until now have been set at 36%. For a long time, agricultural issues were one of the most disputed areas of negotiations, and it was not clear whether they would ultimately be covered by the FTA. In India the agricultural sector is of fundamental socio-economic importance, employing nearly half of the population, so including this sector in the agreement raised serious concerns on the part of India. Finally the parties managed to hammer out a consensus, under which Indian duties will be cut on European alcoholic beverages, olive oil, and processed agricultural products such as baked goods and sweets.
In Europe the deal with India is perceived as less controversial than the Mercosur agreement, as it is much more conservative and avoids issues that could potentially be disputed by either party. Sensitive sectors of European agriculture are to remain fully protected under the deal with India, as products such as beef, poultry, rice and sugar are excluded from the agreement (the lack of comparable protective clauses in the Mercosur agreement was the main source of criticism of that proposal). The strategy of exemptions followed in the case of the India deal effectively neutralises charges of endangering European food producers. And all products imported from India will still have to comply with the EU’s rigorous health and food-safety regulations. Meanwhile, the EU and India are negotiating a separate agreement on geographical indications. This will guarantee legal protection in India for the EU’s producers of traditional foods, blocking the sale of all types of counterfeit or imitation products.
But the agreement will extend beyond the exchange of goods by also easing trade in services—including guarantees for the financial sector not previously encountered in India, and regulations facilitating the mobility of specialists.
However, the agreement will not directly address public procurement. Because India is not a party to the WTO’s Agreement on Government Procurement (GPA), from the perspective of EU procurement law India is treated as a “third country.” And under the Kolin doctrine, economic operators from third countries do not enjoy guaranteed equal access to public contracts on the EU market. This means that contractors from India do not have the same rights as contractors from EU member states, nor entities from other countries that are parties to relevant international agreements with the EU. As a result, their access to the EU public procurement market is greatly restricted.
The situation is analogous in the other direction. In India, European contractors are subject to the local regulations, and the free-trade agreement with the EU will not give them any additional rights. It is true that Indian public procurement procedures provide for the mechanism of “global tender enquiries,” which are open to foreign contractors. In such proceedings, contractors from outside India can file bids under the same conditions as local contractors. Nonetheless, that procedure is subject to numerous protectionist restrictions.
In practice, however, Indian contractors have been present on the European public procurement market for decades. An example is the Croatian tender for reconstruction and expansion of the 83-km Dugo Selo – Novska rail line, with an estimated budget of EUR 620 million. Out of four bids submitted, two are by contractors from India. In turn, Polish contractors are thriving on the Asian market. Ekolog, a company focusing on clean technologies, won a tender for construction of an integrated solid waste management centre for the Bengaluru Airport. Solaris, one of Europe’s leading manufacturers of electric buses, and also from Poland, was involved in carrying out a joint venture with its Indian peer JBM Auto to produce vehicles of this type for the Indian market. Ultimately the Indian partner assumed full control over that project, but it does reveal the potential for transfer of European transportation technologies to the Indian market.
Who will benefit?
It is claimed that European producers of green technologies and mining technologies will gain the most from the FTA with India, along with companies from the defence industry. Significantly, cooperation in the defence sector is set to reach an unprecedented level thanks to the related signing of the first-ever Security and Defence Partnership between India and the EU. Under that partnership, a forum is to be created bringing together defence companies from both sides. The aim is to continually seek opportunities for cooperation. There are also plans to tighten the cooperation in fields such as maritime security, cybersecurity, and anti-terrorism.
The progressive urbanisation of India opens broad fields for cooperation in municipal infrastructure, such as wastewater treatment plants, solid waste management, and transport, particularly high-speed rail. Both parties to the FTA declared an emphasis on growth of renewable energy sources and artificial intelligence. The agreement provides businesses from the EU privileged access to the Indian market for services, including key sectors such as financial services and shipping. It may also make it easier for European manufacturers to move their production of India. In turn, the agreement provides Indian companies easier access to EU markets such as electronics, chemicals, textiles, petroleum-based products, and steel.
A great majority of representatives of EU member states perceive the FTA with India as advantageous from the perspective of the European market, pointing to the potential to create new growth opportunities and jobs. The deepening of the strategic partnership between the EU and India is also of great significance extending beyond the purely commercial dimension to include broader geopolitical and economic cooperation.
Impact of the FTA on the Polish economy
Polish companies have had a presence on the Indian market for years, as witnessed by such firms as Canpack (packaging), Polmor (steel constructions) and Billennium (IT/consulting services). Moreover, commercial exchange between Poland and India has been growing for several years, reaching USD 5.7 billion in 2024. This makes Poland India’s largest trading and investment partner in Central & Eastern Europe. Today India is the world’s fifth-largest economy, and all signs suggest that it will reach third place before the end of this decade. Thus Poland could become something like India’s “gateway to Europe,” as a key tech and logistics hub. A major event in this context was Narendra Modi’s visit to Poland in 2024 (the first by an Indian prime minister in nearly half a century), which resulted in raising the countries’ bilateral relations to the rank of a strategic partnership.
Even now, the presence of Indian capital in Poland is distinct and diversified. The sector of tech and services for business is represented by global giants like HCL Technologies, Tata, Wipro, and Infosys, which have chosen Poland as the site for their operating and R&D centres serving European markets. Equally important is the share of industrial investors (such as the plants of ArcelorMittal and the Samvardhana Motherson group), as well as strong representation in pharmaceuticals. This investment structure confirms that the Polish market is no longer just an outlet for sales, but also provides strategic operational support for Indian expansion in the EU. Notably, the leaders of the EU and India have agreed to launch the first pilot EU contact point in India, which will support legal migration of skilled workers to the EU, focusing first on IT specialists. This mechanism can provide meaningful support for reinforcing Poland’s position as a business centre for Indian investors.
Between 2013 and 2023, the value of commercial exchange between Poland and India rose 192%. According to preliminary analyses, the Polish machinery sector can expect to see growth in exports, including manufacturers of mining machinery and equipment for heavy industry, which are currently subject to import duties of 7.5–15%. Other expected beneficiaries of the FTA in Poland are manufacturers of specialised medical devices, the green tech sector, and cosmetics. Effective elimination of tariffs should also help Polish companies compete with global players.
Thus signing of the free trade agreement between the EU and India may spark a redefinition of Polish/Indian economic relations. An outlet that previously seemed inaccessible has a chance of transforming into a full-fledged sales market, although a demanding one for Polish investors. With the conclusion of the EU–India negotiations, the path to exploiting the huge economic potential of India, as part of Polish expansion onto Asian markets, is opening wider than ever before.
Julia Rutka, Infrastructure, Transport, Public Procurement & PPP practice,
Tomasz Kisiel, Competition & Consumer Protection practice,
Filip Olszówka, Dispute Resolution & Arbitration practice, Wardyński & Partners
