India, EU Finalise Talks on ‘Mother of All Deals’, Pact to Be Signed Today

India and the European Union have completed talks on a wide-ranging free trade agreement after nearly 20 years, with the deal expected to cut tariffs, boost two-way trade in goods and services, and deepen the strategic partnership as both sides adjust to shifting global trade and security policies.

The agreement will be formally announced at a high-level summit in New Delhi, where Prime Minister Narendra Modi is scheduled to host European Commission President Ursula von der Leyen and European Council President Antonio Costa. The summit is also expected to seal a strategic defence partnership and a separate mobility framework.

India–EU FTA: scope, chapters and parallel negotiations

According to officials, the India–EU FTA spans 24 chapters that cover trade in goods, services and investment. Alongside the main trade text, India and the EU are also holding parallel negotiations on an investment protection agreement and on Geographical Indications, which deal with products linked to specific regions.

Commerce Secretary Rajesh Agrawal said on Monday that the long-running negotiations are now complete. "Negotiations have been successfully concluded. The deal has been finalised," Agrawal said, adding that the outcome is seen in New Delhi as balanced and forward-looking and should tie India more closely into European value chains, PTI reported.

India–EU FTA: signing process and political clearances

Agrawal stated that legal scrub work on the FTA text is in progress, with both sides aiming to complete procedures quickly so that the agreement can be signed later this year and potentially take effect early next year. The pact must clear the Union Cabinet in India and obtain ratification from the European Parliament, which could stretch over several months.

Commerce and Industry Minister Piyush Goyal has earlier called the India–EU FTA "the mother of all deals", highlighting its broad scope and political weight. Formal negotiations first began in 2007, making this one of India’s lengthiest trade talks with any partner, spanning different economic cycles and policy phases on both sides.

India–EU FTA: tariff relief and sectoral impact

The FTA is expected to ease or remove tariffs on a large share of bilateral trade, giving duty-free or preferential access to many Indian exports. Labour-intensive sectors are set to benefit in particular, including textiles, chemicals, gems and jewellery, electrical machinery, leather goods and footwear, which currently face relatively high duties in the EU market.

Under existing structures, the EU’s average tariff on Indian products is about 3.8 per cent, but levies on many labour-heavy items are near 10 per cent. India’s weighted average tariff on EU-origin goods stands at 9.3 per cent, with steep rates on automobiles, plastics, chemicals and pharmaceutical products. A typical FTA template would see both partners cut or remove duties on over 90 per cent of traded goods while easing restrictions on services such as telecommunications, transport, accounting and auditing.

India–EU FTA: trade disruption context and export diversification

The deal comes amid global trade disruption linked to sharply higher US tariffs, which have left Indian exporters facing duties of up to 50 per cent in some markets. Against this backdrop, the India–EU FTA is expected to support diversification of export destinations, reduce dependence on a limited set of markets and lessen reliance on China for trade and supply chains.

India’s merchandise trade with the EU reached $136.53 billion in 2024-25, with exports at $75.85 billion and imports at $60.68 billion. This makes the EU India’s largest trading partner in goods. Trade in services between the two sides in 2024 was $83.10 billion, and India recorded a trade surplus of $15.17 billion in 2024-25.

Key Indian exports to the EU include petroleum products, electronics, textiles and garments, machinery, chemicals, pharmaceuticals, gems and jewellery, auto components, footwear and coffee. Imports from the EU mainly comprise machinery, electronics, aircraft, medical devices, chemicals and plastics. The EU accounts for about 17 per cent of India’s total exports, while its own exports to India make up 9 per cent of overall shipments.

Von der Leyen, who attended India’s Republic Day celebrations as Chief Guest, stressed the wider value of the partnership. "A successful India makes the world more stable, prosperous and secure, and we all benefit," she said in a post on X earlier in the day, framing the agreement in terms of shared stability and growth.

The summit programme on Thursday begins at 11.10 am with a wreath-laying ceremony at Raj Ghat, followed by a meeting between Modi and von der Leyen at Hyderabad House, where joint press statements are planned for 1.15 pm. At 3.05 pm, von der Leyen is scheduled to join a business event at Bharat Mandapam, then meet the Vice President at 4.30 pm and the President at Rashtrapati Bhavan at 6 pm, before departing Delhi at 9.30 pm. Costa is expected to leave the capital on Wednesday.

With the India–EU agreement, the NDA government is on track to close eight major trade deals since 2014, including arrangements with Australia, the UK, the UAE, the EFTA bloc and Mauritius. The FTA with the EU, combined with talks on investment protection and Geographical Indications, is expected to broaden India’s export base, give companies access to a stable European market and help reshape trade ties at a time when global tariffs and supply chains are under strain.