The proposed India-European Union Free Trade Agreement (FTA) has the potential to significantly reduce both tariff and non-tariff barriers, opening fresh business opportunities for companies on both sides, Estonia's Ambassador to India Kristi Karelsohn said on Wednesday, 21 October 2026. Karelsohn expressed hope that the landmark deal will be signed by leaders of India and the EU before the end of the year.

What the FTA Could Unlock

Speaking on the state of bilateral ties, Karelsohn said the agreement is expected to lower existing customs duties while addressing non-tariff hurdles that particularly burden smaller businesses. 'It is not just about tariffs. Customs procedures, certification requirements and other regulatory hurdles can be particularly difficult for smaller companies,' she said.

She noted that non-tariff barriers — covering everything from regulatory compliance to product certification — have long posed systemic challenges for companies attempting to access foreign markets, and that the FTA could meaningfully address these friction points beyond mere duty reductions.

Estonia's Stake in the Deal

While acknowledging that Estonia is a relatively small economy with a limited manufacturing base, Karelsohn highlighted strong potential in digital services, technology, and cybersecurity — sectors where Estonian firms have developed recognised global expertise. For companies of this profile, she argued, non-tariff barriers and procedural complexities are often a greater obstacle than customs duties alone.

India-Estonia relations are currently in 'excellent shape' and entering a 'particularly exciting phase', the ambassador said, aided by deepening engagement between New Delhi and Brussels at the broader India-EU level.

India's Growing Global Ambitions

Karelsohn also touched on India's expanding role in international affairs, signalling Tallinn's explicit support for New Delhi's bid for a stronger voice in multilateral forums. 'We have recently seen India's growing ambition to play a greater role in the world and in global organisations. I think this ambition needs to be supported because the international organisations and structures we see today were established a long time ago, in a very different era,' she said.

She added that Estonia fully understands and supports India's aspirations, and would like to see large democratic nations such as India exercise greater influence across global platforms and institutions.

Where the Negotiations Stand

The India-EU FTA has been under negotiation for several years, with both sides resuming formal talks in 2022 after a near-decade-long pause. The timeline for a year-end signing, as expressed by the Estonian envoy, would represent a significant acceleration in what has historically been a complex and drawn-out process. This comes amid broader efforts by the EU to diversify trade partnerships and reduce dependencies following geopolitical shifts in Europe and Asia. Whether all outstanding issues — including those around data flows, government procurement, and intellectual property — can be resolved within that window remains to be seen.