NEW DELHI — In a major geopolitical shift, India and the European Union are poised to announce a landmark trade agreement, concluding nearly 20 years of intermittent negotiations. The deal comes as both powers seek to diversify their economic partnerships amid rising trade tensions with the United States.
Indian Commerce Secretary Rajesh Agarwal confirmed on Monday that negotiations have concluded. The announcement is expected during the current visit of European Commission President Ursula von der Leyen and European Council President António Luís Santos da Costa, who were guests of honor at India’s Republic Day celebrations.
A Strategic Pivot The timing of the deal is significant. Both Brussels and New Delhi are facing increasing economic pressure from Washington. India is currently navigating 50% tariffs imposed by U.S. President Donald Trump, while the EU recently faced threats of an escalated trade war.
European Council President Costa emphasized the deal’s broader intent, stating it sends an “important political message” that India and the EU favor agreements over protectionism. Commission President von der Leyen echoed this sentiment, noting a shared commitment to “shaping a new global order.”
Economic Implications Dubbed the “mother of all trade deals” by officials, the agreement covers substantial ground:
- Market Access: It lowers barriers for Indian exports to Europe and eases entry for European goods—specifically automobiles and beverages—into India.
- Scale: Prime Minister Narendra Modi noted that the combined partnership represents 25% of global GDP and one-third of global trade.
- Growth: The EU is already India’s largest trading partner in goods, with trade reaching $136bn (£99.4bn) in 2024-25.
Next Steps While the deal will be announced immediately following a bilateral summit on Tuesday, the formal signing is scheduled for later this year, pending approval from the European Parliament and Council. This agreement follows a string of recent trade successes for India, including pacts with the UK, Oman, and the EFTA bloc.
