India-EU Set to Conclude Landmark Free Trade Agreement After 18 Years

India and the European Union are set to announce the conclusion of long-awaited free trade agreement (FTA) negotiations on January 27, during the India-EU Summit. The pact, hailed by Commerce Minister Piyush Goyal as the “mother of all deals,” marks the culmination of 18 years of talks aimed at strengthening economic ties and diversifying global trade amid rising US tariffs.

The summit will see European Commission President Ursula von der Leyen and European Council President Antonio Costa hold talks with Prime Minister Narendra Modi. While the agreement will be formally signed after legal vetting, implementation will follow approval by the EU Parliament and India’s Union Cabinet. The FTA is expected to provide duty-free access to key Indian exports, including textiles, gems and jewellery, chemicals, leather, and electrical machinery.

Sensitive agricultural sectors, including dairy, sugar, and beef, have been excluded from the deal to protect domestic producers in both India and the EU. The pact also aims to facilitate trade in services such as telecommunications, accounting, and transportation, while negotiations on investment protection and Geographical Indications (GI) continue in parallel.

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India-EU trade is substantial, with bilateral goods trade reaching USD 136.53 billion in 2024-25, giving India a surplus of USD 15.17 billion. Indian exports include petroleum products, electronics, textiles, machinery, and pharmaceuticals, while imports from the EU feature machinery, electronics, aircraft, and chemicals. Both regions are major investment partners, with EU FDI in India totaling USD 117.4 billion.

The agreement is particularly strategic as it will help India reduce dependence on China and offset disruptions caused by high US tariffs. Discussions are also addressing EU’s carbon border adjustment mechanism (CBAM) and recognition of India as a “data-secure” country under EU’s GDPR, ensuring Indian exporters can remain competitive while meeting regulatory standards.

Once concluded, the FTA will be India’s largest in both economic size and regulatory scope, covering all 27 EU nations under a single framework. Experts say the deal could reshape India’s trade dynamics, enhance export opportunities, and strengthen economic and geopolitical engagement with Europe.

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