On 27 January 2026, India and the European Union concluded negotiations on what has been widely described as the “mother of all trade deals”. This Free Trade Agreement (FTA) is designed to reduce tariffs on over 90% of goods traded between the two economies. The bilateral trade between these 2 regions was $120 billion in 2024.
Now let’s break down what exactly this trade holds for the Indian die & mould industry. The deal presents both a tremendous opportunity and a new set of challenges.
While the FTA has been announced and the proposals agreed upon, it is important to note that it is not yet fully in force. Legal vetting, ratification by the European Parliament, and India’s domestic approval processes are yet to be processed. Simply said, the real implementation of these new tariffs will take time, likely unfolding over the next few years. Nevertheless, understanding its potential impacts is critical for firms looking to position themselves advantageously.
At its core, the agreement signals the removal of export tariffs that Indian engineering products face in Europe, which include industrial machinery, machine tools, dies and moulds, electrical equipment, and mechanical appliances. Currently, these products face significant tariffs under normal WTO rules, which limit competitiveness and increase costs for EU buyers. Once the FTA is implemented fully, it will quickly eliminate these duties, allowing Indian manufacturers to price their products more competitively and access European markets with ease & better predictability.
The technical implications for the die & mould sector are profound. Dies and moulds are essential components for automotive, aerospace, consumer appliance, and industrial fabrication sectors. They are high-precision products that rely on highly advanced manufacturing processes, from CNC machining and EDM to specialised grinding and inspection. The reduced tariffs will allow Indian exporters and upper edge to compete on cost without compromising quality. Thus, once effective, this trade will definitely boost the long-term relationship between the tooling industries of both regions.
At the same time, the deal opens up opportunities on the input side. European machinery and high-precision tooling such as CNC, grinders, EDM machines, inspection equipment, and specialised fixtures will face significantly reduced or zero import duties when brought into India. For die & mould manufacturers, this means easy access to advanced technology with lower capital costs.
The FTA’s benefits will phase in over time. For plastics, some duties are removed at entry into force, with the rest over seven years; for car parts, most tariffs will be eliminated in five to ten years; and for machinery and tooling, about half the tariffs will drop immediately, with the remainder phased over a decade. This staggered implementation allows firms to plan strategically, aligning capacity expansion, technology upgrades, and workforce training with the timeline of tariff reduction.
Yet, opportunities come with new competitive pressures. European machinery and tooling companies will find it easier to sell into India, bringing high-precision, automated, and digital-ready solutions. This particular deal will push the Indian die & mould manufacturers to modernise, adopt advanced manufacturing technologies, and continuously improve quality to maintain relevant. In the automotive sector, the reduction of duties on European cars from 70–100% to 10–40% over time will expand consumer choice but also challenge domestic mid- and premium manufacturers, indirectly influencing demand for local dies and moulds.
The broader context is equally relevant. Indian electronics and engineering goods stand to benefit as tariffs up to 10% are eliminated, while the rubber industry gains from India’s natural advantage in global tyre and automotive supply chains. These shifts create synergies for die & mould manufacturers, who supply critical tooling across these sectors, amplifying the potential impact of the FTA.
Non-tariff facilitators, including simplified customs procedures, regulatory cooperation, and standards alignment, will further ease market entry for Indian exporters. Harmonisation of mechanical, safety, and environmental standards with the EU reduces the need for repeated testing and certification, cutting costs and accelerating time to market. However, Indian companies must remain mindful of carbon-related obligations, such as the EU’s Carbon Border Adjustment Mechanism (CBAM), which may require reporting and compliance on steel and other high-carbon inputs.
Ultimately, the India–EU FTA creates a strategic window for Indian die & mould manufacturers. Firms that invest in technology, quality, and operational excellence can secure long-term partnerships, integrate into European supply chains, and significantly boost exports. Those that delay may face increasing competition from European entrants in the domestic market, underscoring the need for proactive modernisation and capacity building.
In conclusion, while the “mother of all trade deals” is still in the process of ratification and implementation, its long-term implications for the Indian die & mould industry are transformative. By combining tariff-free market access, cheaper high-tech inputs, and regulatory facilitation, the FTA offers Indian manufacturers the chance to compete globally, improve precision and productivity, and integrate into high-value European supply chains. Success will depend not just on cost advantages but on the ability to upgrade technology, ensure quality, and meet international standards, shaping a decade of growth and evolution for India’s precision engineering sector.
The FTA’s benefits will phase in over time. For plastics, some duties are removed at entry into force, with the rest over seven years; for car parts, most tariffs will be eliminated in five to ten years; and for machinery and tooling, about half the tariffs will drop immediately, with the remainder phased over a decade. This staggered implementation allows firms to plan strategically, aligning capacity expansion, technology upgrades, and workforce training with the timeline of tariff reduction.
Yet, opportunities come with new competitive pressures. European machinery and tooling companies will find it easier to sell into India, bringing high-precision, automated, and digital-ready solutions. Indian die & mould manufacturers will need to modernise, adopt advanced manufacturing technologies, and continuously improve quality systems to maintain and grow market share. In the automotive sector, the reduction of duties on European cars from 70–100% to 10–40% over time will expand consumer choice but also challenge domestic mid- and premium manufacturers, indirectly influencing demand for local dies and moulds.
The broader context is equally relevant. Indian electronics and engineering goods stand to benefit as tariffs up to 10% are eliminated, while the rubber industry gains from India’s natural advantage in global tyre and automotive supply chains. These shifts create synergies for die & mould producers, who supply critical tooling across these sectors, amplifying the potential impact of the FTA.
Non-tariff facilitators, including simplified customs procedures, regulatory cooperation, and standards alignment, will further ease market entry for Indian exporters. Harmonisation of mechanical, safety, and environmental standards with the EU reduces the need for repeated testing and certification, cutting costs and accelerating time to market. However, Indian firms must remain mindful of carbon-related obligations, such as the EU’s Carbon Border Adjustment Mechanism (CBAM), which may require reporting and compliance on steel and other high-carbon inputs.
Ultimately, the India–EU FTA creates a strategic window for Indian die & mould manufacturers. Firms that invest in technology, quality, and operational excellence can secure long-term partnerships, integrate into European supply chains, and significantly boost exports. Those that delay may face increasing competition from European entrants in the domestic market, underscoring the need for proactive modernization and capacity building.
In conclusion, while the “mother of all trade deals” is still in the process of ratification and implementation, its long-term implications for the Indian die & mould industry are disruptive. By combining tariff-free market access, cheaper high-tech inputs, and regulatory facilitation, the FTA offers Indian manufacturers the chance to compete globally and improve precision and productivity. Success will depend not just on cost advantages but on the ability to upgrade technology, ensure quality, and meet international standards, shaping a decade of growth and evolution for India’s precision engineering sector.
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