After nearly two decades of negotiations, India and the European Union (EU) have finally concluded talks for a Free Trade Agreement (FTA). The landmark deal, hailed as the "mother of all deals" by India's Commerce and Industry Minister Piyush Goyal, marks the end of 18 years of intermittent discussions, which initially started in 2007, were suspended in 2013, and then relaunched in June 2022. The formal declaration of the concluded negotiations is expected at the 16th India-EU Summit in New Delhi on January 27, 2026, coinciding with India's Republic Day celebrations.
Sonia Prashar, the Secretary General of the Federation of European Business in India (FEBI), views the FTA as a landmark step in strengthening one of the most consequential economic partnerships globally. FEBI welcomes the announcement of the EU-India Free Trade Agreement. According to Prashar, the agreement establishes a rules-based framework that will unlock growth in trade, investment, and industrial collaboration for a combined market of nearly 2 billion people.
While the FTA is expected to boost trade and investment flows between the two regions, Prashar suggests that the biggest dividend of the India-EU FTA lies in co-creation. She believes that the true value of the agreement lies less in symbolism and more in its ability to simplify, scale, and accelerate what is already working.
The agreement arrives at a time when bilateral trade in goods and services has reached approximately EUR 190 billion. The FTA is expected to reduce or eliminate tariffs on over 90% of goods, liberalize services trade in sectors like telecommunications and professional services, and create a vast free trade area encompassing roughly 2 billion people and a significant share of global GDP. Key components of the agreement include India agreeing to slash import duties on certain EU-made cars and the exclusion of sensitive sectors like agriculture to protect domestic interests. Duties will be cut on 99.5% of goods exported from India to the EU, including seafood and footwear. In return, India will reduce or eliminate tariffs on 96.6% of goods imported from the EU, including phased cuts for European carmakers and alcohol producers.
The announcement of the FTA comes amid high-level diplomatic engagements, with European Commission President Ursula von der Leyen and European Council President Antonio Costa in New Delhi as chief guests for India's 77th Republic Day celebrations. Legal scrubbing of the text is underway, and both sides are aiming for an early signing later in 2026 and potential entry into force in early 2027, subject to approvals from the European Parliament and India's Union Cabinet.
The EU-India FTA is part of a broader strategy by both sides to diversify market access and counter global protectionism. The EU has recently concluded trade pacts with Mercosur, Indonesia, and Mexico, while India has been pursuing multiple FTAs with countries like the UK, New Zealand, and Oman. India has concluded fast deals with partners that are accommodative. The India-New Zealand trade negotiations, after being stalled in 2015, began afresh in March 2025 and were concluded in December.
Industry bodies have also welcomed the FTA, with the Automotive Component Manufacturers Association of India (ACMA) describing it as a significant milestone for strengthening India's integration with global automotive value chains. ACMA anticipates that the deal will facilitate new opportunities for exports, technology partnerships, and investment-led growth for India's auto component industry. The Federation of Automobile Dealers Associations (FADA) also contributed to the shaping of the FTA.
Once implemented, the pact will create a combined market of nearly 2 billion people, spanning the world's fourth-largest economy (India) and the second-largest economic bloc (EU). The agreement marks India's most ambitious trade pact so far and is set to reshape supply chains, pricing power, and growth prospects across sectors.
