On September 11, 2026, the European Commission sent its proposals to the EU Council for the signature and conclusion of the trade agreement between the EU and India, a step toward what would be the largest trade deal either side has ever concluded, one that removes or reduces tariffs on about 90 percent of goods traded and is projected to save EU exporters roughly €4 billion a year in duties. The stakes are already large: EU-India goods trade was worth €120 billion in 2024, equal to 11.5 percent of India's total trade in goods, making the EU India's largest trading partner. Two of the deal's showcase wins are cars and wine. India's tariff on European cars falls from 110 percent to 10 percent, within an annual quota of 250,000 vehicles. The tariff on premium European wine drops from 150 percent to 20 percent, and on medium-range wine to 30 percent. Read only that far, and this is a deal about how much India is opening up.
Source: European Commission factsheets on the EU-India FTA's main benefits and EU agri-food exports under the FTA. Tariff-cut percentages are The Signal's calculations. Chart: The Signal.
It is worth slowing down on what is missing from that list. The European Commission's own agriculture directorate reports that dairy products were worth €19.7 billion in 2024, 8 percent of the EU's total agri-food exports and its second-largest agri-food export category that year. Cars cleared a 110 percent wall. Wine cleared a 150 percent wall. Dairy did not move. India's own commerce ministry factsheet on the concluded FTA states that India "prudently safeguarded sensitive sectors, including dairy, cereals, poultry, soymeal, certain fruits and vegetables, etc, balancing export growth with domestic priorities", which in the language of a trade agreement means zero duty relief on the single category the EU most wanted opened. Irish dairy industry leaders said as much themselves: Dairy Industry Ireland's director called the deal's outcome for dairy "no early gains" for the sector, since high Indian tariffs on cheese, milk powders and dairy-based nutritional products did not move at all, even while welcoming India as a market worth pursuing over the long run.
Not a first, a rule
The same clause is showing up for a third deal in a row, not new behavior for India's trade diplomacy. Dairy was excluded from tariff concessions in the India-Australia Economic Cooperation and Trade Agreement, which entered into force in December 2022, despite Australia being a major dairy exporter. It was excluded again in the India-UK Comprehensive Economic and Trade Agreement, signed in July 2025, alongside cereals, millets and pulses. Commerce Minister Piyush Goyal said in February 2026 that India has protected the interests of farmers and the dairy sector in every free trade agreement it has concluded, naming Australia, New Zealand, the UK, the EU, EFTA and the US.
Dairy carried no tariff concession in any of the three most recent deals India's commerce ministry points to below.
| Trade agreement | Status | Dairy tariff outcome |
|---|---|---|
| India-Australia ECTA | In force since December 2022 | Excluded from concessions |
| India-UK CETA | Signed July 2025 | Excluded from concessions |
| India-EU FTA | Sent to EU Council for signature, September 2026 | Excluded from concessions |
Source: Ministry of Commerce & Industry press releases on the Australia ECTA, the UK CETA and the EU FTA. Table: The Signal.
Why dairy is the one line that never moves
The reason is arithmetic about votes and livelihoods, not sentiment about milk. Dairy is India's largest agricultural product by value, contributing 5 percent to the national economy and directly employing more than 8 crore, or 80 million, farmers, with over 8 crore rural households dependent on the sector as of a September 2025 government backgrounder. No single manufacturing sector India has opened to a trade partner touches a comparable number of households directly. The sector has also grown fast in exactly the years India has been negotiating these deals. India's milk production rose 63.56 percent over the decade to 2023-24, from 146.30 million tonnes in 2014-15 to 239.30 million tonnes, making India the world's largest milk producer.
Source: Department of Animal Husbandry and Dairying, via PIB. Growth-rate figure is The Signal's calculation. Chart: The Signal.
The honest objection
The strongest case against a blanket, repeated exclusion is that dairy is no longer the fragile industry the policy was built to protect. Output has grown by nearly two thirds in a decade and India is already the world's largest producer, which is not the profile of a sector that needs shielding from European competition indefinitely. On that reading, holding the same line against Australia in 2022, the UK in 2025 and the EU in 2026 looks less like policy than habit.
That case is real, but it understates what a concession would touch. The sector directly employs more than 8 crore farmers and touches a comparable number of rural households, a production base with no equivalent in scale in Europe's far more consolidated dairy industry. That industry still managed €19.7 billion in exports in 2024 on the back of that consolidation and its accompanying scale economies. The scale gap is the crux of it: NDDB Chairman Meenesh Shah has said most Indian dairy farmers own just two to three cows and get no production subsidy, against farms of 1,000 to 1,500 cows backed by extensive government support in developed dairy economies. That is the industry's own answer to whether growth alone has made the sector competition-ready. A government that has told three different trading partners the same no on the same product is not improvising a fresh red line each time. It is applying a standing one.
The Signal
The European Commission has now put the EU-India FTA to the Council for signature, though the deal is not yet signed: the Council must still authorize it and the European Parliament must consent, alongside India's own domestic ratification, before it can enter into force, expected later in 2026 or in the first half of 2027. Cars and wine are getting the headlines because they moved. Dairy is the more useful number precisely because it did not. Goyal has said India has protected dairy in every FTA it has signed, and the record from Australia to the UK to the EU backs that claim exactly, three deals running. The test worth watching is not this agreement, where the outcome was never really in doubt, but the next negotiation with a partner India cannot afford to say no to twice. Until one shows up, the tariff line on milk is not a negotiating position up for trade. It is a floor.
Reporting basis: the EU-India FTA's signature timeline, tariff schedule for cars and wine, and the EU's trading relationship with India are per the European Commission's own trade and agriculture directorates. India's exclusion of dairy from the EU FTA is per the Ministry of Commerce & Industry's own factsheet, via the Press Information Bureau; the same exclusion in the India-Australia and India-UK deals is per separate Ministry of Commerce & Industry releases, also via PIB. Commerce Minister Piyush Goyal's statement naming all six of India's concluded FTAs is per All India Radio's News on Air. India's dairy sector employment and output figures are from Press Information Bureau backgrounders citing the Department of Animal Husbandry and Dairying and National Accounts Statistics. The EU dairy trade's own reaction to the exclusion is per the Irish Examiner, quoting Dairy Industry Ireland; NDDB Chairman Meenesh Shah's comparison of Indian and developed-market dairy farm scale is per AgriMoon, from his interview with Fortune India; the FTA's remaining ratification steps and expected entry-into-force window are per The Tribune, via ANI. The percentage tariff cuts and the milk production growth rate are The Signal's calculations from those figures.
