After nearly two decades of negotiations, India and the European Union announced on Tuesday that they have reached a free trade agreement to deepen economic and strategic ties. The accord, which the EU chief described as the mother of all deals, could impact as many as 2 billion people.
The deal between two of the world’s biggest markets comes as Washington targets both India and the EU with steep import tariffs, disrupting established trade flows and pushing major economies to seek alternate partnerships.
“This agreement will bring major opportunities for the people of India and Europe,” India’s Prime Minister Narendra Modi said in a virtual address during a conference.
“It represents 25% of the global GDP and one-third of global trade.”
The accord will see free trade on almost all goods between the 27 members of the EU and India, covering everything from textiles to medicines and bringing down high import taxes for European wine and cars.
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India and the EU also agreed on a framework for deeper defense and security cooperation, and a separate pact aimed at easing mobility for skilled workers and students, signaling their partnership extends beyond commerce.
US Pressure Propels India-EU Trade Deal
The negotiations for the India-EU deal got a new impetus after U.S. President Donald Trump’s strong-arm trade tactics, including threatening his European allies with punitive tariffs over their objections to his attempt to take control of Greenland.
Speaking at a joint news conference in New Delhi with European Commission President Ursula von der Leyen and European Council President António Costa, the Indian leader said the partnership with the EU will strengthen stability in the international system at a time of turmoil in the global order.
“Europe and India are making history today. We have concluded the mother of all deals,” von der Leyen said in a post on X.
India is expected to reduce or eliminate tariffs for 96.6% of EU exports, while Brussels will reciprocate with similar reductions in phases that eventually cover nearly 99% of India’s shipments by trade value, according to statements from both sides.
India’s sectors poised to gain from the deal include textiles, apparel, engineering goods, leather, handicraft, footwear and marine products while the EU’s gains will be in wine, automobiles, chemicals and pharmaceuticals, among others.
Trade between India and EU stood at $136.5 billion in 2024 to 2025. The two sides hope to increase that to about $200 billion by 2030, Indian officials say.
AP