India, EU finalise talks for 'mother of all deals', pact to be signed today

New Delhi,UPDATED: Jan 27, 2026 06:34 IST

India and the European Union are poised to officially announce the conclusion of negotiations on a comprehensive free trade agreement at a high-level summit in New Delhi today, marking a major breakthrough after nearly 20 years of talks.

Prime Minister Narendra Modi will host European Commission President Ursula von der Leyen and European Council President Antonio Costa at the summit, which is also expected to finalise a strategic defence partnership and a mobility framework.

The agreements are likely to anchor a broader India–EU vision to navigate the geopolitical flux triggered by Washington’s recent trade and security policies.

Commerce Secretary Rajesh Agrawal confirmed on Monday that negotiations for the long-pending free trade agreement have been successfully wrapped up.

"Negotiations have been successfully concluded. The deal has been finalised," Agrawal said, describing the pact as balanced and forward-looking from India’s perspective. He added that the agreement would help integrate India more closely with the European economy, PTI reported.

Von der Leyen, who was the Chief Guest at India’s Republic Day celebrations, underlined the strategic importance 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.

According to Agrawal, the legal scrubbing of the FTA text is currently underway, with both sides working to complete procedural formalities and sign the agreement at the earliest. The pact is expected to be signed later this year and could come into force early next year.

While the agreement will require approval from the Union Cabinet in India, it must also be ratified by the European Parliament, a process that could take several months.

Commerce and Industry Minister Piyush Goyal has previously called the India–EU FTA "the mother of all deals", reflecting its scale and strategic significance. Negotiations began in 2007, making it one of India’s longest-running trade talks.

The agreement spans 24 chapters covering trade in goods, services and investment, and is accompanied by parallel negotiations on investment protection and Geographical Indications.

FULL SCHEDULE FOR KEY INDIA–EU SUMMIT

On Thursday, the programme will begin at 11.10 am with a wreath-laying ceremony at Raj Ghat, followed by a meeting with Prime Minister Narendra Modi at Hyderabad House. Joint press statements are scheduled at 1.15 pm.

Later in the day, at 3.05 pm, von der Leyen will attend a business event at Bharat Mandapam. She is also expected to meet the Vice President at 4.30 pm, followed by a meeting with the President at Rashtrapati Bhavan at 6 pm. Von der Leyen will depart Delhi at 9.30 pm, while Costa is scheduled to leave the capital on Wednesday.

TARIFF RELIEF FOR LABOUR-INTENSIVE SECTORS

The pact is expected to offer duty-free or preferential access to a wide range of Indian exports, particularly from labour-intensive sectors such as textiles, chemicals, gems and jewellery, electrical machinery, leather and footwear.

Currently, the EU’s average tariff on Indian goods is about 3.8 per cent, but duties on labour-intensive products hover around 10 per cent. India’s weighted average tariff on EU goods stands at 9.3 per cent, with steep duties on automobiles, plastics, chemicals and pharmaceuticals.

Under a typical FTA framework, both sides are expected to reduce or eliminate import duties on over 90 per cent of traded goods and ease restrictions on services such as telecommunications, transport, accounting and auditing.

STRATEGIC RELEVANCE AMID GLOBAL TRADE DISRUPTION

The deal assumes added importance amid global trade disruptions caused by sharply higher US tariffs, with Indian exporters currently facing duties of up to 50 per cent in some markets.

The India–EU FTA is expected to help Indian exporters diversify markets, reduce dependence on traditional destinations, and lower reliance on China for trade and supply chains.

India's bilateral trade in goods with the EU was $136.53 billion in 2024-25 (exports worth $75.85 billion and imports worth $60.68 billion), making the EU India's largest goods trading partner. The services trade in 2024 was $83.10 billion. India has a trade surplus of $15.17 billion in 2024-25. The EU market accounts for about 17 per cent of India's total exports, and the bloc's exports to India constitute 9 per cent of its total overseas shipments.

India’s key exports to the EU include petroleum products, electronics, textiles and garments, machinery, chemicals, pharmaceuticals, gems and jewellery, auto parts, footwear and coffee. Major imports from the EU range from machinery and electronics to aircraft, medical devices, chemicals and plastics.

With the India–EU agreement, the NDA government is poised to finalise eight major trade pacts since 2014, including deals with Australia, the UK, the UAE, the EFTA bloc and Mauritius.

The pact will take shape at a time when high US tariffs have shaken global trade. India is facing duties of up to 50 per cent, making new markets urgent for exporters. The FTA is expected to widen India’s export base and cut reliance on China. Besides FTA, the two are also negotiating a pact in investment protection and Geographical Indications (GI).

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With inputs from agencies

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