Just over five months ago, the European Union finalized the most ambitious trade agreement in its history. And in Spain, very few have yet grasped what this means for olive oil and wine.
On January 27, Brussels and New Delhi announced the conclusion of negotiations for a Free Trade Agreement between the European Union and India, after more than two decades of intermittent talks. The result is, simply put, the largest free trade area ever created: encompassing nearly 2.000 billion people and a quarter of global GDP.
The text is currently undergoing legal review, a process expected to take five to six months. Formal signing is anticipated by the end of this year, and provisional implementation of the agreement is expected around 2027. In other words, there's still time to prepare, but not as much as it might seem.
For the Spanish agri-food sector, the key issue is tariffs. India has traditionally been one of the world's most closed markets for European wine, with tariffs that in some cases exceed 150% and which, once margins, taxes, and licenses are added, can quadruple the final price for the consumer. The new agreement substantially reduces this barrier, and it does so by including products such as olive oil, kiwifruit, and pears—three categories in which Spain has a considerable export presence and which were excluded from the agreement that India already signed with the United Kingdom.
That's no small detail. It means that, in the olive oil sector, Spain will be able to compete in India on better terms than a trading partner that previously had a head start.
The agreement, as a whole, eliminates or reduces tariffs on more than 90% of trade lines for the European side and 86% for the Indian side, with liberalization coverage approaching 97-99% of bilateral trade. Of course, some sectors remain protected in both directions: the EU maintains protection on beef, rice, sugar, and poultry, while India protects dairy products and basic grains. But oil and wine are not among those affected.
Let's be realistic: this isn't going to translate into orders next week. Between the legal review, ratification by the European Parliament and the Indian Lok Sabha, and the gradual implementation of tariff reductions—which in some cases will take several years—the actual timeline for this opportunity is measured in quarters, not weeks.
And that's precisely the opportunity many companies are going to miss. Experience with other trade agreements—New Zealand, Vietnam, South Korea—is always the same: companies that begin building business relationships, registering trademarks, geographical indications, and distribution networks before tariffs are lowered are the ones that capture the largest share of the market in the first few years. Those that wait until the FTA is in effect end up fighting for what's left.
Furthermore, India is not a market that can be understood by analogy with any other. Health regulations, fragmentation by state, the diversity of distribution channels, and cultural differences surrounding alcohol consumption—remember that several Indian states maintain restrictions or prohibitions—require a much more artisanal approach from the outset than in other markets where Spain already has a history of exporting.
With the legal review underway and implementation still a couple of years away, the real room for maneuver is at this stage: validating the market, understanding the regulations state by state, and starting to build a distribution network before the tariff reduction is operational.
Ana María Giraldo
Business Consultant, Gedeth Network
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