India–EU Draft FTA Sets Five-Year MFN for Services, With Review Built In

Overview

• The draft’s services clause requires each side to treat the other’s service providers at least as favorably as any third country for five years after entry into force.
• The MFN measure excludes taxation treaties, mutual recognition of standards or authorisations, and dispute‑settlement procedures, and it permits limited local border‑area advantages.
• Either party may seek an earlier review if interests are affected, and if the MFN is not extended after five years the obligation ends while benefits already granted remain.
• The package pairs services commitments with sweeping goods liberalisation, targeting duty‑free access for about 93% of Indian exports to the EU and tariff cuts or removal on 96.6% of EU export value to India, with sensitive farm items kept out.
• The text also outlines customs and digital trade facilitation, including faster clearances, greater transparency, paperless trade, and recognition of electronic signatures, and remains a draft pending final approval and ratification.