New Delhi is poised to host a momentous Republic Day celebration on January 26, 2026, with European Commission President Ursula von der Leyen and European Council President António Costa expected to attend as chief guests. This invitation marks only the second time India has invited leaders of a major international grouping to grace the occasion, the first being the ASEAN leaders in 2018. The presence of the EU chiefs underscores the deepening strategic and economic partnership between India and the European Union, with a Free Trade Agreement (FTA) potentially being signed during this high-level meet.

Negotiations for the India-EU FTA have been ongoing, with both sides expressing a strong desire to finalize the agreement. EU Trade Commissioner Maros Sefcovic recently stated that a deal is expected to be signed by Republic Day. Indian Commerce Minister Piyush Goyal is expected to travel to Europe in the second week of January for further negotiations. The agreement aims to boost bilateral trade, which currently stands at approximately USD 136 billion. The EU is India's largest trading partner.

Several sticking points remain in the negotiations. India has voiced concerns regarding the EU's carbon border tax and steel safeguard measures, while the EU seeks a reduction in India's tariffs on automobiles. The EU has also requested reduced customs duties on medical devices, wine, spirits, meat, and poultry, as well as improvements to India's intellectual property rights regime. India, in turn, seeks to ease non-tariff barriers and gain greater access for its services and professionals through clearer rules of origin and customs procedures. Both sides have reportedly found a middle ground on the Carbon Border Adjustment Mechanism (CBAM). India has also agreed to allow imports of European automobiles at lesser tariffs.

Sources suggest that the FTA could be a "living document," meaning it can be amended even after being signed on January 27, allowing for flexibility and adjustments as needed. This approach acknowledges that some issues may require further negotiation and refinement even after the initial agreement is in place.

The India-EU summit on January 27 is expected to provide further impetus to the relationship, with discussions on strengthening defense and security cooperation and addressing global challenges. The FTA is expected to open the wider European market for India.

Beyond the FTA, individual European nations are also strengthening ties with India. Italy is emerging as a key economic partner, and Prime Minister Narendra Modi has been invited to visit Rome in 2026. Italian Prime Minister Giorgia Meloni is expected to visit India for the AI summit in February.

The convergence of the Republic Day celebrations with the potential signing of the FTA and the subsequent India-EU summit signifies a pivotal moment in the India-EU relationship. This multifaceted engagement, encompassing trade, security, and strategic cooperation, reflects a shared commitment to a stronger and more dynamic partnership in an evolving global landscape.