On Monday, India and the European Union finalized a 'landmark' free trade agreement, which Indian Prime Minister Narendra Modi described as the 'mother of all deals' during his speech at the India Energy Week on Tuesday. PM Modi has confirmed that the agreement has been signed between India and the European Union, describing it as a “perfect” example of partnership between two major economies. The FTA is expected to boost trade by removing barriers on over 90% of Indian goods.
After confirming that India and the EU have signed a trade pact, PM Modi said the move would provide a major boost to manufacturing and the services sector. He noted that the deal represents “25 per cent of the global GDP and 1/3rd of global trade.”
Commerce Secretary Rajesh Agrawal announced on Monday that India and the EU have finalized their FTA negotiations, with the agreement set to be revealed on Tuesday, January 27. He said the agreement will take effect next year, adding, “Legal scrubbing of the text will take 5-6 months; formal signing will be done post that.”
European Commission President Ursula von der Leyen called the FTA a “historic trade agreement” that would create a market of two billion people. On Republic Day, she shared a clip of the parade on X with the caption: “A successful India makes the world more stable, prosperous and secure. And we all benefit.”
FTA to strengthen India-EU ties across trade, defence, climate change, critical technologies, and global security.
The deal will boost manufacturing and services, adding it represents “25 per cent of the global GDP and 1/3rd of global trade."
Von der Leyen described the FTA as a “historic trade agreement” that would create a market of two billion people.
Defence framework pact and strategic agenda expected to be unveiled, as Europe seeks partners beyond the US and China.
India-EU strategic partnership since 2004, with the new Security and Defence Partnership aimed at deeper defence cooperation.
Indian firms may join the EU’s SAFE programme, enhancing defence readiness and collaboration.
FTA negotiations began in 2007, paused in 2013, and resumed in 2022.
MoU expected on Indian worker mobility to Europe, building on existing ties with France, Germany, and Italy.
Leaders to discuss global challenges, including the Russia-Ukraine war.
India-EU goods trade reached about $136 billion in FY 2024-25.
Trump's reaction to trade deal
India and the EU finalised their trade agreement amid ongoing discussions between India and the United States. US Treasury Secretary Scott Bessent expressed concern over the development in a Sunday news interview, stating that European countries are effectively financing a war “against themselves” by purchasing refined Russian oil products from India.
