European Union and Indian leaders have unveiled a broad trade agreement following nearly two decades of intermittent negotiations, a process that gained urgency in recent months due to tariffs imposed by U.S. President Donald Trump. Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen hailed the deal as the “mother of all deals,” emphasizing its significance as India’s most extensive trade pact, accounting for a third of global trade. The agreement, which slashes tariffs on almost 97% of European goods imported to India by value, is projected to double EU exports to India by 2032, creating a vast market of two billion people.
The announcement of the landmark deal coincided with India’s Republic Day military parade, where European leaders were honored guests, underscoring the strategic implications of the agreement. The trade deal aims to dismantle India’s high trade barriers and open its protected domestic market, including reducing tariffs on European automotive imports significantly. In return, India stands to benefit from eliminated tariffs on various goods entering the EU, alongside easier access for skilled Indian professionals to work in Europe.
The negotiations were expedited in response to the challenges posed by the Trump administration’s trade policies, which heightened the importance of reaching an agreement. The deal signifies a shift towards cooperation amid global trade tensions and strategic dependencies. Notably, contentious issues such as access to India’s agricultural and dairy sectors were excluded from the agreement, indicating a mutual eagerness to finalize the deal promptly. The formal signing is expected later this year, with the agreement potentially taking effect by early 2027 after legal vetting.