India–EU Seal Landmark Free Trade Pact, Opening New Chapter in Global Economic Ties

Delhi: India and the European Union have reached a breakthrough in their long-running trade negotiations, successfully finalising a comprehensive Free Trade Agreement that is expected to significantly reshape economic ties between the two sides. The deal, described by officials as modern, balanced and future-ready, is set to be formally unveiled on Tuesday and is being seen as one of the most important trade agreements signed by India in recent years.

Senior government officials said the agreement will now undergo a detailed legal review, a process that may take several months. Once this stage is completed, the pact will be formally signed and is likely to come into effect next year. The agreement aims to boost two-way trade, encourage large-scale investments and strengthen supply chains between India and the 27-member European Union.

The timing of the deal is politically and diplomatically significant. Top European leaders, including European Commission President Ursula von der Leyen and European Council President António Costa, are currently in New Delhi for the 77th Republic Day celebrations and the India–EU Summit. Their visit has underlined the growing strategic and economic importance both sides attach to the partnership. Prime Minister Narendra Modi has described the relationship with Europe as a key pillar of India’s global engagement.

The renewed push for the trade agreement gained momentum after India and the EU decided to fast-track talks last year, following years of stalled negotiations. Discussions were revived in 2022 against the backdrop of changing global trade conditions, rising geopolitical tensions and uncertainty in international markets. With trade barriers increasing elsewhere, both India and the EU saw value in securing a stable and mutually beneficial economic partnership.

Key negotiations focused on market access and tariff structures. The EU sought easier access to the Indian market for sectors such as automobiles and industrial goods, while India pushed for fairer treatment of its exports, particularly steel and manufactured products. As part of the compromise, India is expected to sharply lower import duties on a limited number of European cars, while sensitive sectors like agriculture and dairy have been kept outside the agreement to protect domestic farmers.