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flag The EU ended tariff breaks on most Indian goods in 2026, raising costs and hurting exports.

flag As of January 1, 2026, the EU has suspended tariff preferences for 87% of Indian exports under the GSP, citing export volume thresholds, forcing Indian exporters to pay full Most Favoured Nation tariffs on key goods like textiles, steel, machinery, and chemicals. flag Only agricultural, leather, and handicraft exports retain limited preferential access. flag This change coincides with the full rollout of the EU’s Carbon Border Adjustment Mechanism, adding compliance costs for steel and aluminum exporters. flag The combined impact of higher tariffs and carbon fees threatens India’s export competitiveness, particularly in price-sensitive sectors, with experts warning 2026 will be one of the toughest years for Indian exports to Europe in over a decade.

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