India allows European Union (EU) banks to open 15 branches over four years under FTA

Key facts

• India has agreed to allow European Union (EU) banks to open 15 branches over four years under the free trade agreement.
• European banks currently operating in India include Deutsche Bank (Germany), BNP Paribas (France), and Societe Generale (France).
• India has provided 100 per cent foreign direct investment (FDI) commitments in the insurance sector and 74 per cent for banking services.
• The India-EU free trade agreement is expected to be signed and implemented this year.
• The trade pact includes a bilateral safeguard mechanism allowing India to raise duty to most favoured nation (MFN) level if imports from the EU surge due to tariff liberalisation.
• Bilateral safeguard measures under the mechanism cannot exceed four years, with an initial two-year period extendable by another two years upon review.
• India has taken carve-outs for national security and reserved policy space in sectors like legal services.
• The agreement includes an insufficient production clause specifying that packaging, labelling, minor assembly, or peeling do not confer origin status.
• India has no obligation under the Intellectual Property Chapter to change or modify any of its intellectual property laws.
• The trade deal mandates a general review by the joint committee within five years of entry into force and every five years thereafter.