PM Modi hails India-EU Free Trade Agreement; calls it game-changer for manufacturing, services, and investment | India News

Prime Minister Narendra Modi on Tuesday described the India-European Union Free Trade Agreement (FTA) as the “mother of all agreements”, stressing that it will strengthen ties between the world’s two largest economies while unlocking vast opportunities for businesses and citizens on both sides.

“A major agreement was signed between the European Union and India yesterday. People call it the mother of all agreements. This agreement will bring great opportunities for the people of India and Europe. This is a perfect example of the partnership between the two major economies of the world,” Modi said.

#WRISTWATCH | Prime Minister Narendra Modi said, “A big agreement was signed between the European Union and India yesterday. People call it the mother of all agreements. This agreement will bring huge opportunities for the people of India and Europe. This is a perfect example of that… pic.twitter.com/Tgyzmlyok— ANI (@ANI) January 27, 2026

The Prime Minister noted that the agreement represents 25 percent of global GDP and almost a third of world trade. “This agreement strengthens our common commitment to democracy and the rule of law. This Free Trade Agreement with the European Union will also complement the UK and EFTA agreements. I congratulate the people of the country on this.”

Drawing attention to the economic benefits, Modi said, “Manufacturing will receive a great support from this trade agreement with the EU, and the services sector will also expand. The Free Trade Agreement will increase the confidence of every investor and businessman in investing in India.”

The FTA comes amid rising geopolitical tensions and US tariff measures against multiple countries. Reacting to the agreement, US Treasury Secretary Scott Bessent criticized the European Union for signing the agreement, saying, “We imposed a 25 percent customs duty on the purchase of Russian oil to India. Guess what happened last week? Europeans signed a trade agreement with India. Europeans are financing the war against themselves.”

The announcement coincides with the 16th India-EU Summit in Delhi, where Modi is scheduled to meet European Commission President Ursula von der Leyen and European Council President Antonio Costa. The summit is expected to mark the official conclusion of the long-pending FTA negotiations, with officials describing it as a “historic” milestone.

Commerce Minister Rajesh Agrawal confirmed on Monday that India and the EU have successfully completed negotiations. The agreement will enter into force next year after legal review, followed by official signature and approval, the official said.

The FTA is expected to transform bilateral trade and investment, covering sectors such as manufacturing, services, clean energy, digital technology and people-to-people mobility. It will also provide a framework for the movement of Indian workers to Europe, complementing existing migration partnerships with France, Germany and Italy.

Defense and security cooperation will also be strengthened under the proposed Security and Defense Partnership (SDP). This initiative will increase interoperability, facilitate India’s participation in the EU’s €150 billion SAFE (Security Action for Europe) program and strengthen strategic cooperation, officials said.

India and the EU first started FTA negotiations in 2007, but the negotiations stalled in 2013 due to differences in goals. Negotiations resumed in June 2022 and resulted in the historic agreement that is expected to open a combined market of approximately two billion people.

Trade data underlines the importance of the agreement: bilateral goods trade reaches $136 billion in 2024-25; India exported 76 billion dollars and imported 60 billion dollars. The EU is India’s largest trading partner, accounting for about 17 percent of India’s exports and about 9 percent of the EU’s exports to the rest of the world.

One of the most notable provisions of the FTA is the opening of India’s automobile sector to European automakers. Import duties on European vehicles are planned to drop from 110 percent to around 40 percent, making brands such as Volkswagen, Mercedes-Benz and BMW more affordable in India.

With the FTA, India will deepen its economic integration with Europe, offset the impact of US tariffs, expand its global trade footprint and strengthen strategic ties in trade, defense and technology.

(With input from agencies)