The free trade agreement between India and the European Union is being considered as a step to change the direction of the global economy. This historic agreement has been named Mother of All Deals. This agreement has been signed between two such big economies, whose combined share is about 25 percent in the total economy of the world. This agreement signed in New Delhi is being considered a big success for India not only economically but also at the geopolitical level.

This deal has come at a time when America’s Trump administration has tried to put pressure on India by imposing tariffs up to 50 percent. In such an environment, India’s signing of such a big agreement with the European Union shows that India is now deciding its own options on the global stage. After this agreement, uneasiness is clearly visible in America.

Why India-EU Free Trade Agreement is historic

Negotiations on this free trade agreement between India and the European Union were going on for many years. With this agreement, India will get better access to European markets, which is expected to increase exports, bring foreign investment and create new employment opportunities. The European Union is already one of India’s major trading partners. This deal will reduce trade tariffs between the two sides, strengthen the supply chain and promote cooperation in areas like technology, manufacturing and green energy. Experts believe that this will help India reduce its dependence on China and establish itself as a global manufacturing hub.

America’s displeasure, no relief from tariffs for India

America’s reaction after the India-EU agreement has been quite strict. Trump administration’s trade representative Jameson Greer has clearly said that India is not going to get any relief in tariffs from America at present. In an interview with Fox Business, Greer said that America’s concerns regarding oil purchases from Russia are not over yet. According to him, India has definitely reduced the purchase of Russian oil, but it is not yet possible to completely separate from it. Greer said that the cheap oil from Russia is economically beneficial for India and that is why it is not easy for India to give up this supply immediately.

America’s stance changed on Russian oil

This statement of Greer seems different from America’s earlier statements. Earlier, it was said by the Trump administration that India has almost stopped purchasing oil from Russia. President Donald Trump himself has also given such statements. Recently, during the Davos Economic Forum, US Finance Minister Scott Besant had indicated that there may be some relief in tariffs imposed on Indian products in the future. But now it has become clear from the latest statement of Jameson Greer that America wants to maintain pressure on India for the time being.

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The long-running Free Trade Agreement (FTA) negotiations between India and the European Union have finally been completed. This historic deal is being called the Mother of all Trade Deals, because through it a huge market consisting of about 25 percent of the world’s global GDP and about 2 billion consumers has been connected. On Monday (26 January 2026), Commerce Secretary Rajesh Aggarwal confirmed this much-awaited deal, while on Tuesday (27 January 2026) Prime Minister Narendra Modi announced it. This deal is considered a major turning point in India’s global economic strategy.

Negotiations on a free trade agreement between India and the European Union first began in 2013, but the process was stalled due to several differences. The talks were restarted in June 2022 and now after a long wait of almost nine years, this agreement has come out in its final form. This agreement is also special because under this, India will get direct and easy trade entry into the markets of 27 European countries. This is expected to further strengthen India’s role in the global supply chain.

EU becomes India’s largest trade partner

The European Union remained India’s largest trading partner in the financial year 2023-24. During this period, the total trade between India and EU reached 135 billion dollars. After the implementation of the new free trade agreement, there is a possibility of rapid growth in this trade.

Duty-free access to more than 97 percent Indian products

Indian exporters are going to get the biggest benefit of this agreement. According to reports, after the implementation of FTA, more than 97 percent of Indian products will get entry into the European market duty-free or at very low duty. Labour-intensive sectors like textile, leather, jewellery, electronics and chemicals will benefit the most. Also, with the end of the special duty-free benefits given to countries like Bangladesh, the competitive position of Indian companies will be further strengthened.

Strategic balance between Trump’s tariff policy

The India-EU Free Trade Deal has come at a time when US President Donald Trump’s tariff policies have increased instability in global trade. America has imposed a tariff of up to 25 percent on Indian products and has also imposed an additional 25 percent penalty on the purchase of Russian oil. The European Union has also been affected by America’s steel and aluminum tariffs. In such a situation, this agreement between India and EU is being seen as a strategic balance against Trump’s tariff policy.

Prime Minister Modi said – This is not just business, it is partnership

Prime Minister Narendra Modi described this agreement as not just a trade agreement but a victory for shared values. He said that this agreement is an ideal example of partnership between the two largest democratic economies of the world. According to the Prime Minister, this deal represents 25 percent of global GDP and almost one-third of global trade and also strengthens democracy, rule of law and international cooperation.

Free trade zone of 2 billion people

European Commission President Ursula von der Leyen described this agreement as historic and said that history has been made today. He said that India and EU together have created a free trade zone of about 2 billion people and this is just the beginning. According to him, this agreement will give new heights to the India-Europe strategic partnership in the coming years and will play an important role in bringing stability to the global economy.

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India-EU FTA: During the high-level meeting held in New Delhi, the much-awaited Free Trade Agreement (FTA) between India and the European Union (EU) was finally sealed, which could not be finalized for the last two decades. This agreement is being called the “Mother of All Deals” because of its comprehensiveness and strategic importance. In fact, the European Union is India’s largest trading partner and about 17 percent of India’s total global trade is with the EU alone, which further increases the importance of this agreement.

Trade surplus trade with EU

If we look at the figures, the total trade between India and EU in the financial year 2024-25 was approximately $ 136.53 billion. In this, the import from EU to India was about 60.68 billion dollars, while India exported about 75.85 billion dollars to the EU. In this way, India achieved a trade surplus of about $ 15.17 billion with the EU, which shows a strong position for Indian exporters.

India-EU relations have been very strong not only in goods but also in the services sector. In the year 2024, services trade between the two will reach approximately $83.10 billion, in which IT services, business services and telecommunications have a major contribution. With the implementation of the new FTA, it is expected that trade barriers will reduce, investment will increase and India-EU economic relations will deepen in the coming years.

Let us know what is going to change after the signing of the historic FT agreement with the EU.

Electronics, clothing and market access

Many important changes can be seen after the historic free trade agreement with the EU is ratified. The most direct impact of this agreement will be on market access in electronics, textiles and other manufacturing sectors. Especially the reduction in customs duty on goods will make Indian products more competitive in the European market, which is expected to give a big boost to exports.

At present, about 10 percent customs duty is imposed on Indian clothes in the European Union, which has been a big challenge for Indian exporters. Under the FTA, this fee is likely to be reduced in a phased manner. This will not only make Indian clothes cheaper but will also increase their demand in Europe. Its direct benefit will be that Indian exporters will be in a better position than countries like Bangladesh and Vietnam and will be able to strengthen their share in the European market.

cars will be cheaper

The sector that is being discussed the most in the India-EU FTA is the automobile sector, because till now the Indian car market has been counted among the most protected markets in the world. At present, 70 to 100 percent import duty is imposed on cars coming from Europe, which is decided depending on the model and price. For this reason, European luxury and premium cars become very expensive for Indian customers and their accessibility remains limited.

According to reports, there may be a big change in this situation after the implementation of FTA. The Government of India has agreed to reduce the import duty on expensive cars priced above Rs 16 lakh to about 40 percent in the initial phase. With this, European cars may become cheaper than before, due to which Indian consumers will have more options. Also, this will increase competition in the Indian auto sector and will also create pressure on domestic companies to further improve technology, quality and innovation.

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India-EU Trade Deal: A big step seems to be taken towards finalizing the historic trade agreement between India and the European Union (EU). In this sequence, European Union President Ursula von der Leyen, who visited India, gave an important statement on Sunday and said that India and Europe have chosen a clear option of strategic partnership, dialogue and openness. He described this proposed agreement as a ray of hope for the world.

Clear message of strategic partnership

Before the summit with Prime Minister Narendra Modi, Von der Leyen said that this partnership between India and Europe is giving a strong message to the whole world. He said in a social media post, ‘India and Europe have chosen a clear option, the option of strategic partnership, dialogue and openness. Leveraging your strengths and building mutual understanding. We are showing a divided world that this path is also possible.

Top EU leaders will be chief guests at Republic Day celebrations

It is noteworthy that European Commission President Ursula von der Leyen and European Council President Antonio Costa will attend India’s 77th Republic Day celebrations as chief guests on Monday. Antonio Costa described India as an important partner of the European Union. “Together we share the capacity and responsibility to defend the rules-based international order,” Costa was quoted as saying in a brief EU statement.

Jaishankar expressed hope for a new beginning

Meanwhile, Foreign Minister S. Jaishankar met both the top leaders of the European Union on Sunday. He expressed hope that the India-EU summit will open a new chapter in bilateral relations. Jaishankar said on social media, “It gives me great pleasure to welcome European Council President Antonio Costa and European Commission President Ursula von der Leyen to India. We are honored to have them as chief guests at the 77th Republic Day celebrations. I am confident that their upcoming discussions with Prime Minister Narendra Modi will open a new chapter in India-EU relations.”

‘Mother of all agreements’

Earlier, during the World Economic Forum meeting in Davos on January 20, Von der Leyen had given a big statement regarding this proposed agreement. He had said that India and the European Union are on the threshold of a historic trade agreement, which will create a huge market of two billion people and which will represent almost a quarter of the global GDP. He termed this agreement as the “mother of all agreements”.

bilateral trade worth 136 billion dollars

It is noteworthy that relations between India and the European Union have continuously strengthened in the last few years. The European Union, as a group, is India’s largest trading partner in goods. The total merchandise trade between India and the European Union in the financial year 2024-25 is about US $ 136 billion, which includes exports of about $ 76 billion and imports of about $ 60 billion.