New Delhi: India and the European Union (EU) have finally sealed a landmark free trade agreement, hailed by Prime Minister Narendra Modi as the “biggest FTA in our history”.
In a post-signing statement on X, the Prime Minister described it as a pact between two of the world’s largest democratic trading blocs, with bilateral trade currently valued at US$213 billion. He emphasised that the deal, signed on January 27, 2026 alongside European Council President Antonio Costa, represents a blueprint for mutual growth and shared prosperity.
The agreement marks the culmination of negotiations that spanned nearly two decades. Talks were first launched in 2007 but stalled in 2016 due to disagreements over access to India’s agricultural and dairy markets.
Resumed in 2022 amid global supply chain disruptions from the COVID-19 pandemic and Russia’s war in Ukraine, discussions gained fresh momentum last year, accelerated by US tariff threats under President Donald Trump.
European Commission President Ursula von der Leyen, who attended India’s Republic Day celebrations as chief guest, dubbed the pact the “mother of all trade deals”. She described it as a tale of two giants, underscoring how India’s rise enhances global security. Urshula von der Leyen highlighted the combined market of nearly two billion people and expressed delight at India’s economic ascent.
Antonio Costa echoed this enthusiasm, portraying India and the EU as strategic partners shaping a resilient global order.
As holder of an Overseas Citizen of India card, he proudly affirmed his Indian roots and stressed the deal’s historic importance for Europe’s fastest-growing partner. Costa called for deeper collaboration on green energy, climate change, and the shift from fossil fuels.
Prime Minister Modi noted the timely coincidence of the signing on Republic Day, involving 27 EU nations. He pointed out benefits for around eight lakh Indians residing in the EU and outlined gains for Indian sectors like textiles, gems and jewellery, and leather goods. The FTA, encompassing roughly 25 per cent of global GDP, promises qualitative improvements across bilateral ties.
Key provisions include tariff reductions on most consumer and industrial goods, though some agricultural products may remain excluded. The EU stands to gain enhanced access to financial, legal services, and procurement opportunities in India. Bilateral trade is projected to surge beyond US$40 billion within five years.
Beyond trade, the pact introduces a defence framework agreement and a strategic agenda, deepening ties in security and technology. This comes as Europe seeks to diversify away from over-reliance on the US and China, bolstering diplomatic and economic links with emerging powers like India.
The Prime Minister described the deal as more than a mere trade accord, but a foundation for people-centric decisions fostering prosperity. EU leaders, in turn, urged joint leadership on global challenges, from peace initiatives to sustainable energy transitions.
This breakthrough arrives against a backdrop of geopolitical flux, positioning India-EU relations as a pillar of stability. Analysts anticipate ripple effects on global supply chains, with India’s manufacturing prowess complementing Europe’s technological edge.
