European Union leaders, including Commission President Ursula von der Leyen and European Council President António Costa, are in India for a pivotal visit (Jan 25-27, 2026) to finalize the long-pending India-EU Free Trade Agreement (FTA). Hailed as the “Mother of all deals,” this landmark pact aims to profoundly reshape global trade, linking India’s fast-growing economy with the significant EU bloc. The visit culminates in an India-EU Summit following Republic Day Parade. Negotiations, revived in 2022, are nearing completion, with an announcement expected.
The FTA will eliminate tariffs on over 90% of traded goods, boost services, and facilitate investments. Covering nearly 2 billion people, it significantly enhances current bilateral goods trade (USD 136.53 billion). For India, the agreement offers substantial economic gains: restoring tariff concessions, lowering duties on key exports (textiles, pharmaceuticals), and attracting foreign direct investment. Goods trade is projected to increase by 20-30%, creating 8-10 million jobs over a decade, bolstering export competitiveness offering an alternative market amidst global protectionism.
The EU anticipates significant benefits, gaining deeper access to India’s vast 1.4 billion-strong market and enabling vital diversification of supply chains away from China. The deal expects to double EU services exports to India, strengthening resilience in sectors like automotive and technology, potentially generating 1-2 million new jobs. Most tariffs will drop to zero, phased over 5-10 years. Total trade could exceed USD 200-250 billion within a decade, with full ratification anticipated by late 2027 or early 2028.