India, EU finalise talks on ‘mother of all deals’, free trade pact to be signed today | India News

India and the European Union are set to announce the outcome of talks on a long-awaited free trade agreement at a high-level summit in New Delhi today, marking a major breakthrough after nearly two decades of talks. Prime Minister Narendra Modi will host European Commission President Ursula von der Leyen and European Council President Antonio Costa and the meeting is also expected to finalize the strategic defense partnership and mobility framework. The agreements are seen as laying the foundations for a broader India-EU strategy amid shifting global trade and security dynamics, driven in part by recent policy shifts in the United States.

Commerce Minister Rajesh Agrawal on Monday confirmed the successful completion of negotiations on the comprehensive free trade agreement (FTA).

Agrawal stated that the agreement is balanced and forward-looking for India and said, “The negotiations have been concluded successfully. The agreement has been completed.” He added that this would help India integrate more deeply with the European economy, according to PTI.

Von der Leyen, the chief guest at the Republic Day celebrations in India, drew attention to the strategic importance of closer relations. “A successful India would make the world more stable, prosperous and secure and we would all benefit from it,” he said in a post on X.

Agrawal said legal review of the FTA text is ongoing and both parties are working to complete the procedural steps. While the announcement is expected today, the agreement is likely to be officially signed later this year and come into force early next year.

The agreement will require the approval of the Union Cabinet of India and the European Parliament, and this process is expected to take several months.

Commerce and Industry Minister Piyush Goyal had earlier described the agreement as the “mother of all agreements”, reflecting its scale and strategic importance. The talks began in 2007, making it one of India’s longest-running trade disputes.

The FTA consists of 24 chapters covering trade in goods, services and investments, as well as parallel negotiations on investment protection and Geographical Indications.

Tariff reduction and market access

The agreement is expected to provide duty-free or preferential access to a wide range of Indian exports, especially from labor-intensive sectors such as textiles, chemicals, gems and jewellery, electrical machinery, leather and footwear.

The average customs duty imposed by the EU on Indian goods is currently around 3.8 per cent, rising to almost 10 per cent on labour-intensive products. India’s weighted average tariff on EU imports is around 9.3 percent, with higher duties on automobiles, plastics, chemicals and pharmaceuticals.

Under a standard FTA framework, both parties are expected to reduce or eliminate tariffs on more than 90 percent of traded goods and ease restrictions on services including telecommunications, transportation, accounting and auditing.

strategic importance

The deal carries additional weight amid global trade disruption caused by a sharp rise in US tariffs, with Indian exporters facing duties of up to 50 percent in some markets. Officials see the deal as a way to diversify export destinations, reduce dependence on traditional markets and reduce reliance on China in trade and supply chains.

India’s bilateral goods trade with the EU stood at $136.53 billion in 2024-25, including $75.85 billion in exports and $60.68 billion in imports, making the bloc India’s largest goods trade partner. While services trade will reach $83.10 billion in 2024, India recorded a trade surplus of $15.17 billion.

The EU accounts for about 17 percent of India’s total exports, while India accounts for about 9 percent of the bloc’s overseas shipments. India’s major exports to the EU include petroleum products, electronics, textiles and ready-made garments, machinery, pharmaceuticals, gems and jewellery, auto parts, footwear and coffee. Major imports include machinery, electronics, aircraft, medical devices, chemicals and plastics.

If concluded as planned, the India-EU deal will be the eighth major trade deal concluded by the NDA government since 2014, following agreements with Australia, UK, UAE, EFTA bloc and Mauritius.

In addition to the FTA, India and the EU continue to negotiate separate agreements covering investment protection and Geographical Indications, further expanding the scope of their economic partnership.