The European Union and India have reached a landmark free trade agreement after nearly 20 years of intermittent negotiations, marking a major shift in global trade dynamics and deepening strategic ties between the two economic powerhouses.
The breakthrough was announced by European Commission President Ursula von der Leyen on social media, describing the agreement as “the mother of all deals” following the conclusion of talks during a high-level summit in New Delhi.
European Council President António Costa, who was also in India, met with Prime Minister Narendra Modi to discuss the historic pact.
The agreement comes at a time when both Brussels and Delhi are seeking to diversify their international partnerships and reduce reliance on trade ties that have been strained by rising protectionist pressures from the United States.
India continues to face 50% tariffs imposed by former US President Donald Trump last year, and negotiations for a separate India-US trade deal have stalled. The EU has also faced friction with Washington over geopolitical disputes and threats of trade retaliation against European allies.
Speaking on Tuesday, von der Leyen said the deal would establish a free trade area encompassing nearly two billion people. “This is only the beginning,” she said, adding that the agreement would significantly deepen the strategic relationship between the EU and India.
European Council President António Costa echoed the sentiment, saying the pact sends a clear political message amid rising global protectionism. Without naming the US directly, Costa said the agreement demonstrated that the EU and India “believe more in trade agreements than in tariffs.”
The deal is expected to be formally signed later this year, after it is approved by the European Parliament and the European Council. A detailed briefing outlining the full scope of the agreement is expected to be released in the coming days.
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Under the agreement, Indian exporters will gain broader access to European markets, while European companies will find it easier to invest and sell goods, including automobiles and beverages, in India — Asia’s third-largest economy.
Prime Minister Modi hailed the agreement as a milestone in global trade, describing it as a partnership between two of the world’s largest economies. “This agreement covers 25% of global GDP and one-third of global trade,” he said during the India Energy Week conference.
The EU is already India’s largest trading partner in goods, with bilateral trade reaching $136 billion in the 2024–25 financial year — nearly double the level recorded a decade ago.
Negotiations for an EU-India trade agreement began in 2007 but collapsed in 2013 due to disagreements over market access, regulations and tariffs.
Talks were revived in July 2022, with major hurdles including India’s automobile and agricultural sectors, as well as carbon-linked trade measures. Analysts are expected to scrutinise the final text closely to understand how these issues were resolved.