India-EU FTA ‘mother of all deals’ concluded: Why the pact wasn’t signed today & major highlights | EXPLAINED | India News
In what has been called a “tectonic shift” in global trade, India and the European Union (EU) officially announced the completion of Free Trade Agreement (FTA) talks on Tuesday.
At a highly publicized summit held at Hyderabad House, Prime Minister Narendra Modi and European Commission President Ursula von der Leyen announced that the two trading giants had completed the “Mother of All Agreements”, establishing a free trade area covering 2 billion people and a quarter of the world’s GDP.
Historical success: Why wasn’t it signed on Tuesday?
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Although there was joy in the atmosphere and the presence of the two leaders was an indicator of the importance of the agreement, no signing ceremony was held. Because the agreement has reached the “conclusion of negotiations” stage, which is a political success rather than being legally binding.
The following procedural requirements must be met before the agreement can be officially “signed” and implemented:
legal brushing: This is a technical review in which legal teams from both parties verify that over 21 sections are compliant, error-free, and in compliance with local laws of both parties. This process is expected to take 5 to 6 months.
Translation: The document must be translated and verified in all 24 official languages of the EU.
Confirmation: After the “clearing” process, the agreement needs to be approved by the European Parliament and the Union Cabinet of India.
The signing process is expected to take place towards the end of 2026 and the agreement will come into force in early 2027.
Key points: What’s in the agreement?
The historic trade deal between India and the EU is a massive economic roadmap that will double the European Union’s exports to India by 2032, providing businesses with an incredible annual savings of nearly €4 billion ($4.35 billion) in customs duties. One of the biggest areas of agreement is the automotive industry, where the current 110% tariff will be reduced to just 10% for a certain quota of 250,000 vehicles per year. Similarly, fans of luxury in Europe will enjoy an incredible discount on tariffs for high-quality wines and spirits; This will reduce the current 150% tariff to between 20% and 30%.
On the other side of the trade deal, Indian industries will gain incredible ground as the EU offers duty-free access to the European market for key sectors such as textiles, leather, jewelery and seafood. To ensure that India’s economy remains stable, the trade agreement has shielded millions of Indian farmers from global competition by carefully excluding sensitive agricultural products such as beef, rice and dairy, which will not be part of the trade agreement.
Geopolitical strategy: Hedging against ‘Trump tariffs’
The need to sign the agreement arose during an unstable year in international trade. With US President Donald Trump continuing to impose high 50% tariffs on some Indian products and transatlantic trade tensions remaining high, both New Delhi and Brussels have taken steps to protect themselves against “unpredictable” US trade policies.
“In an uncertain world, this agreement acts as a shield,” said a senior trade analyst. With this agreement, India has managed to place itself in a stable alternative category to the US and China and has secured the largest ever trade breakthrough with any country.
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