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 economic and business politics of the world is changing rapidly. Due to US President Donald Trump’s protectionist policies, high tariffs and uncertain trade stance, many big countries are now adopting the strategy of reducing their dependence on America. India is emerging as a strong and reliable economic partner at the center of this global change. Many countries in Europe, Asia and North America are now moving away from the traditional West-centric model towards a West-East economic axis, where India is being seen as a long-term option and strategic balance.

British Prime Minister Keir Starmer’s visit to China is an indication of this changing global equation. This will be the first visit to China by a British Prime Minister in the last 8 years. The purpose of this tour is to improve the deteriorated relations with China and strengthen trade cooperation again. Starmer will also be accompanied by senior ministers and many big business leaders. In Beijing he will meet President Xi Jinping and Prime Minister Li Qiang, while business meetings will be organized in Shanghai. According to Reuters, Britain is now considering America as an uncertain partner and wants to reduce its economic dependence. Currently, China is Britain’s fourth largest trading partner and by the middle of 2025, trade between the two countries is expected to reach more than £100 billion.

Canada’s strategy changed, India became primary partner

Canada, a close ally of America, has also started a major change in its foreign and trade policy. Canadian Prime Minister Mark Carney is preparing to visit India in the first week of March. This visit is taking place at a time when Donald Trump threatened to impose heavy tariffs on Canada and created controversy by calling it the 51st American state. Canadian Foreign Minister Anita Anand clearly said in Davos that Canada will never become a part of America. He also said that Canada wants to double its exports outside the US in the next ten years. Under this strategy, India and China have been selected as major partners.

Brazil trusts India, the new axis of the Global South

India’s role is continuously strengthening in the countries of the Global South. Brazilian President Luiz Inacio Lula da Silva is visiting India in February. He will reach India with a large business delegation and will hold extensive talks with Indian industrialists. This visit is an indication that developing and emerging economies are looking at India not just as a market but as a strategic economic partner.

India-EU FTA becomes a gamechanger

The biggest example of this global change is the India-European Union Free Trade Agreement, which was signed on 26 January 2026. European Commission President Ursula von der Leyen has called it the Mother of All Deals. This agreement connects about 25 percent of the world’s global GDP and about two billion people. Under this, the European Union will reduce or eliminate tariffs on about 97 percent of the products sent to India, while India will also remove tariffs on 93 percent of European products in a phased manner. With this, European cars, wine, chocolate and processed food will become cheaper in India, while Indian textile, pharma, engineering and IT products will get a bigger market in Europe.

America’s concern and India’s clear policy

America seems uncomfortable with these new global alliances. US Treasury Secretary Scott Besant raised questions about India purchasing oil from Russia, while Canada was warned against cheap goods from China. Despite this, the stance of the countries is clear. They now want strategic autonomy and do not want to depend on any one power. India’s Foreign Minister S. Jaishankar said that no country can expect to put a veto on India’s relations with the rest of the world. This thinking is today making India the center of global economic change.

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India EU Trade Deal: The main announcements at the India-EU summit on Tuesday are likely to include completion of negotiations on a free trade agreement, finalization of a strategic defense agreement and a framework for the movement of Indian and European citizens.

Prime Minister Narendra Modi will host European Commission President Ursula von der Leyen and European Council President Antonio Costa at the summit. It is likely that in this summit both sides will develop a comprehensive approach to deal with the geopolitical turmoil arising from America’s policies on trade and security.

Participated as chief guest in Republic Day celebrations

Costa and von der Leyen attended the 77th Republic Day celebrations as chief guests on the line of duty. Von der Leyen said on Monday, a successful India makes the world more stable, prosperous and secure and we all benefit from it.

Last week, the top leader of the European Union said that India and the EU are close to a ‘historic trade deal’. Due to which a market of two billion people will be created. Which will be about a quarter of the global gross domestic product (GDP).

Talks have been going on between the two sides for a long time

The EU and India first started negotiations for a free trade agreement in 2007. But the talks were postponed in 2013 due to differences in ambitions. Talks resumed in June 2022. It is likely that this free trade agreement will bring qualitative changes in further strengthening bilateral relations in many areas.

Will there be focus on these issues?

The main focus of the summit will be on trade, defense and security, climate change, critical technologies and strengthening the rules-based global order. Apart from finalizing the free trade agreement, both sides will also present a defense framework agreement and a strategic agenda at the summit.

India and the European Union have been strategic partners since 2004. Officials said that the proposed Security and Defense Partnership (SDP) will help in further deepening the defense and security cooperation between the two sides.

SDP will increase mutual coordination in the defense sector and will open the way for Indian companies to participate in the ‘SAFE’ (Security Action for Europe) program of the European Union. India and the European Union are also going to start negotiations on Security of Information Agreement (SOIA) in the summit.

Indian workers will benefit

An MoU related to facilitating the movement of Indian workers to Europe is also expected to be an important outcome of the summit. According to officials, this agreement will provide a framework to take forward mobility initiatives between EU member states and India.

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