Tariff Dismantling Timeline

The machinery and electrical equipment sector is the main industrial beneficiary of this agreement, as it constitutes the EU’s most important export to India, worth €16.3 billion in 2024.

Although the agreement provides for transition periods (known as staging categories) of up to 10 years, machinery and electrical equipment will see their tariffs eliminated for the most part within 5 to 7 years.

The technical annex called “Tariff Elimination Schedules, which contains the exhaustive line-by-line list specifying the detailed tariff reduction per product, has not yet been published.

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Elimination of Technical Barriers (TBT)

Beyond tariffs, the agreement facilitates the marketing of machinery by simplifying safety tests:

• Supplier’s Declaration of Conformity (SDoC): India will accept SDoC for safety aspects of electrical and electronic machinery and equipment, avoiding the need for mandatory third party testing in India.
• International Standards: Indian technical regulations should be based on international standards, such as those of the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC).

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Maintenance and After-sales Facilities

The treaty includes legal provisions that protect the life cycle of industrial machinery:

• Repaired Goods: No duties will be applied to machinery re-entering the territory after having been temporarily exported for repair.
• Accessories and Spare Parts: Tools, spare parts and instructional materials will be considered as a single product together with the main machine, provided they are delivered and invoiced together and are of a type and value customary for such equipment.
• Remanufactured Goods: It is guaranteed that India will not treat remanufactured goods less favorably than it treats equivalent goods in new condition.

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Investment and Market Access

The agreement ensures a more stable and predictable investment environment through various legal disciplines:

• National Treatment: Each party shall accord to the goods of the other party treatment no less favorable than that accorded to its own domestic products in respect of internal taxes and regulations.
• Government Procurement: EU companies will get national treatment in Indian government tenders. In addition, “offsets“, i.e., conditions that require European companies to make local investments or use local content to win a contract, are prohibited.
• Intellectual Property Protection: We ensure a high level of protection and enforcement of intellectual property rights, including trademarks, industrial designs and trade secrets.
• Industrial Services: European companies will have access to key sectors such as maritime services (including dredging and cable laying) and financial services, exceeding the levels of liberalization that India has granted to other trading partners.

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Trade Facilitation and Removal of Barriers

To improve business operations, the treaty includes measures to reduce bureaucracy:

• Customs Simplification: Procedures will be streamlined to make exports faster and cheaper.
• Authorized Economic Operators (AEO): Partnership programs are established for companies that meet certain security and compliance criteria, granting them benefits such as a lower rate of physical inspections and priority in customs clearance.
• Technical Barriers to Trade (TBT): The agreement seeks cooperation on standards and the promotion of the use of international standards as a basis for technical regulations.