EU, India seal landmark free trade deal after nearly two decades of talks
Pact touted as “mother of all deals” creating a market of two billion people; formal signing to follow legal review
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The European Union and India have agreed on a sweeping free trade deal, European Commission President Ursula von der Leyen said Tuesday, declaring the pact the “mother of all deals” and a “free trade zone of two billion people.”
“Europe and India are making history today,” von der Leyen said on X, adding that both sides are set to benefit. India’s Prime Minister Narendra Modi also hailed the breakthrough, telling supporters, “Yesterday, a big agreement was signed between the European Union and India.”
The agreement caps almost 20 years of on-and-off negotiations and is poised to open India’s vast, tightly protected market to the 27-nation bloc, its largest trading partner. Bilateral trade between India and the EU totaled $136.5 billion in the fiscal year through March 2025, according to figures cited by Indian officials.
While the text was not released, the roadmap is clear: an Indian government official familiar with the matter said the deal now enters legal vetting expected to take five to six months, with implementation targeted within a year. The official said both sides are working to expedite technical checks so formal signing can follow the review.
Trade experts in New Delhi said tariff cuts embedded in the pact could quickly reshape flows in key sectors. Ajay Srivastava, a former Indian trade official, said lower barriers with the EU would bolster India’s labor-intensive exports and “help partly offset the impact of U.S. tariffs.” He added that European products would gain immediate price advantages in India with relief from some of its high import duties, “for instance up to 110% on cars.”
The breakthrough comes amid a flurry of global trade activity. Just days earlier, the EU signed a pivotal pact with South America’s Mercosur bloc, following deals last year with Indonesia, Mexico and Switzerland. Over the same period, India finalized agreements with Britain, New Zealand and Oman.
Negotiations between Brussels and New Delhi were relaunched in 2022 after a nine-year lull and gained momentum following a series of U.S. tariff actions under President Donald Trump. Talks gathered pace as the two sides looked to hedge against trade uncertainty with Washington, where Trump’s bid to acquire Greenland and tariff threats against European nations unsettled long-standing alliances. An India-U.S. deal collapsed last year after communications broke down, and Indian exports have faced additional U.S. duties, including a 50% tariff on some goods.
For the EU, the India pact extends its strategy of locking in supply chains and market access across diverse regions. For India, it balances exposure to U.S. tariffs while attracting European capital and technology, particularly in manufacturing where New Delhi seeks to deepen domestic capabilities.
Von der Leyen framed Tuesday’s announcement as a starting point rather than a culmination. “This is only the beginning,” she said on X. “We will grow our strategic relationship to be even stronger.”
The legal scrub and ratification steps ahead are likely to focus on tariff schedules, rules of origin, market access in sensitive sectors, and mechanisms for dispute resolution—areas that have stalled previous efforts. Both sides, however, are signaling urgency to move from political agreement to operational rules in the coming months.
With the EU and India recentering their trade ties, the world’s largest democracies are betting that deeper integration can deliver growth while buffering geopolitical shocks. If the timeline holds, businesses on both continents could begin adjusting supply chains and pricing as implementation nears—an early dividend from a deal long stuck on the drawing board.
By Abdiwahab Ahmed
Axadle Times international–Monitoring.
