EU Roundup: January 2026

Operating in Europe means facing a constantly shifting legal landscape. Our EU Roundup highlights key developments that matter most, cutting through the noise to give you a clear, practical view of what is coming and what it means for your business.

Staying informed on EU-level law helps you manage risk, maintain compliance and remain competitive in a fast-moving regulatory environment.

This edition, brought to you from our EU Knowledge Hub, highlights:

1. EU-India trade agreement
2. Russian gas ban Regulation
3. Detergents and surfactants Regulation
4. Digital Networks Act
5. Cybersecurity Package
6. EU-Mercosur trade agreement
7. AI cybersecurity new standard
8. Foreign Subsidies Regulation Guidelines
9. Cyprus Presidency priorities
10. Crisis compulsory licensing Regulation

EU–India: Free Trade Agreement concluded

On January 27, the EU and India concluded a Free Trade Agreement (FTA). It aims to remove major barriers, expand market access and support supply chain diversification. The FTA will apply once approved by the European Parliament and the Council, and after ratification by India. Tariff cuts and regulatory changes will phase in over up to ten years.

The deal liberalises most goods traded between the partners. India eliminates duties on 96.6% of EU exports and the EU liberalises 99.5% of its tariff lines. Tariffs on EU machinery, electrical equipment, chemicals, pharmaceuticals, motor vehicles and steel will be phased out gradually. Indian agri‑food tariffs fall substantially, while the EU keeps protections for its most sensitive products.

Why this matters: The agreement changes how EU businesses enter and operate in India over the next decade. Legal teams should map affected products, contracts, and pricing models early. Board discussions should cover India growth plans, supply chain shifts, and when commercial terms should change as tariffs fall.

EU: Council approves Regulation to phase out Russian gas imports

On January 26, the Council of the EU approved a Regulation to phase out Russian gas imports under the REPowerEU plan. The Regulation introduces a progressive ban on Russian pipeline gas and LNG. The ban begins six weeks after entry into force. Existing contracts may continue during a limited transition period. A full ban will apply from early 2027 for LNG and from autumn 2027 for pipeline gas. Member states must verify the origin of imported gas and prepare national diversification plans by 1 March 2026. Penalties for non‑compliance may reach €40 million.

Why this matters: Some energy contracts and sourcing routes may become unlawful during the transition. You should identify direct and indirect Russian gas exposure, plan exits or renegotiations, and secure alternatives. Boards should test energy resilience, pricing assumptions, and capital plans against enforced supply changes.

EU: Revised health and environmental rules on detergents and surfactants

On January 22, the European Parliament adopted revised rules on detergents and surfactants to improve health and environmental protection. The rules require clearer product information, full ingredient transparency and physical labels for refill formats. They introduce a new risk assessment for detergents with microorganisms and give poison centres unified access to product data. The Regulation also bans animal testing, strengthens biodegradability rules and requires biodegradable films for most capsules within six years. It will apply to all EU manufacturers and importers three and a half years after publication.

Why this matters: These rules will change how you design, label, and place detergent products on the EU market. You should assess reformulation needs, data readiness, and packaging plans early. Boards should consider product portfolios, refill models, and investment timing against the new approval and market entry conditions.

EU: Digital Networks Act proposal

On January 21, the European Commission proposed the Digital Networks Act (DNA) to accelerate 5G/6G and fibre deployment across the EU. The DNA aims to support greater investment in EU connectivity infrastructure. The rules will take effect once adopted by the European Parliament and Council.

Why this matters: You may need to revise contracts, sourcing plans and long‑term infrastructure commitments as EU network rules tighten. The DNA could disrupt legacy connectivity models and increase dependence on compliant providers. Start mapping exposure, updating transition plans for copper switch‑off, and briefing the board on investment and resilience impacts.

EU: Cybersecurity Package proposed

On January 19, the European Commission proposed a cybersecurity package designed to strengthen the EU’s resilience against cyber threats. The package includes proposed amendments to the EU Cybersecurity Act and targeted updates to NIS 2. They focus on securing ICT supply chains and expanding EU‑wide cybersecurity certification schemes. It also enhances the role of the EU Agency for Cybersecurity in supporting coordination and threat awareness across Member States.

Why this matters: Depending on the outcome, you may need to redesign contracts, sourcing models and product assurances to meet new EU cybersecurity rules. Global supply chains could face higher certification costs and delays.

EU: Trade agreement with Mercosur

On January 17, the EU signed the trade agreement with Mercosur, which aims to remove most tariffs and expand market access. The agreement introduces safeguards for EU farmers, protects 344 Geographical Indications and sets open rules for critical raw materials. The agreement should apply once approved by the Parliament, which can vote only after the Court of Justice issues its opinion. This review could take 18 to 24 months, unless the European Commission decides for provisional implementation.

Why this matters: The agreement signals a shift in how Europe and South America will trade for decades. Businesses should consider how deeper ties between the blocs may change competitive pressure and assess how they may shape long‑term sourcing plans. They should also evaluate how the framework could influence production locations, partnerships, and future investment.

EU: New standard for securing AI systems

On January 15, the European Telecommunications Standards Institute (ETSI) published a new standard establishing baseline cybersecurity requirements for AI models and systems. It has been formally approved by national standards bodies. It covers the full AI lifecycle and targets AI‑specific risks such as data poisoning, model obfuscation, and indirect prompt injection.

Why this matters: This standard signals a shift toward stricter expectations for how AI is built and run. Businesses that use or supply AI should check whether their systems meet these baseline security measures. These may shape future buyer demands, contract terms, and decisions on which models are safe to deploy at scale.

EU: Foreign Subsidies Regulation Guidelines published

On January 9, the European Commission issued Guidelines explaining how the Foreign Subsidies Regulation will operate. They clarify how the Commission assesses foreign financial contributions and when companies may face review in mergers and public procurement. The Guidelines also explain how the balancing test works and when the call‑in mechanism may apply to cases below notification thresholds.

Why this matters: EU scrutiny of foreign funding can disrupt cross‑border deals, tenders, and sourcing. You may need to map all government-linked support and test exposure in upcoming transactions. You may also adjust supply chains or renegotiate state-backed arrangements that could trigger intervention or become unsustainable.

EU: Cyprus Presidency priorities as of 1 January 2026

On January 1, Cyprus assumed the EU Council Presidency and set priorities on governance, enlargement, the economy, justice and the environment. The Presidency will progress capital markets measures, sustainable finance legislation and digital euro talks, while implementing EU defence readiness. Key environmental files, including the Circular Economy Act and early REACH discussions, are expected to move forward in 2026.

Why this matters:  These priorities will shape the pace and direction of EU policy across finance, sustainability and defence throughout 2026. Businesses should expect faster movement on files that influence investment choices, product planning and cross‑border operations. This because the Presidency focuses on closing gaps in Europe’s economic and regulatory framework.

EU: New crisis compulsory licensing rules adopted

On January 1, the EU adopted updated rules on compulsory licensing for crisis situations. The regulation allows the Commission to authorise the temporary use of protected inventions as a last‑resort measure during serious cross‑border emergencies. The scope and duration of such licences are strictly limited, and rights holders must receive fair compensation. The aim is to safeguard access to essential products and protect the functioning of the single market in major crises.

Why this matters: Businesses with patent‑dependent products should assess how these powers might impact supply plans, crisis contracts, and negotiations if their technology becomes critical in an EU‑level incident.

Co-authored by Uendi Barreti, Paola Paccani  and Clare Johnston (Knowledge)

Further reading

EU Pay Transparency Directive: Snapshot update

Global Supply Chain Horizons – January 2026

Navigating EU Law | Strategic Guidance for a Shifting Regulatory Landscape | Business Topic