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India–EU Free Trade Agreement Finalised: “Mother of All Trade Deals” Reshapes Global Commerce
Summary: India and the European Union have concluded a landmark Free Trade Agreement at the 16th India–EU Summit, unlocking zero-duty access for Indian exports, massive services and mobility gains, green technology cooperation, and strategic trust between two global economic giants-marking a defining moment for Viksit Bharat 2047.
A Historic Day for India–EU Relations
On 27 January 2026, India and the European Union reached a historic breakthrough with the formal conclusion of the India–European Union Free Trade Agreement (India–EU FTA).
The announcement was jointly made by Prime Minister Shri Narendra Modi and European Commission President H.E. Ms. Ursula von der Leyen during the 16th India–EU Summit, held in New Delhi as part of the visit of senior European leaders to India.
This agreement is widely being described as the “Mother of All Trade Deals”, reflecting its scale, depth, ambition, and strategic importance-not just for India and Europe, but for the global trading system.
Why This Agreement Is a Global Game-Changer
India and the European Union are among the world’s largest economic forces:
- India – 4th largest economy
- European Union – 2nd largest economy
- Together they account for 25% of global GDP and nearly one-third of world trade
The integration of two large, diverse and complementary economies through this FTA creates unprecedented opportunities in trade, investment, technology, clean energy, innovation, and skilled mobility.
At a time when global trade faces fragmentation, protectionism, and geopolitical uncertainty, the India–EU FTA sends a strong signal of trust, predictability, and commitment to open, rules-based trade.
India–EU Trade at a Glance (2024–25)
- Total Goods Trade: ₹11.5 lakh crore (USD 136.54 billion)
- Exports: ₹6.4 lakh crore (USD 75.85 billion)
- Imports: ₹5.1 lakh crore (USD 60.68 billion)
- Services Trade: ₹7.2 lakh crore (USD 83.10 billion)
The EU is already one of India’s largest trading partners, and the FTA is expected to multiply trade volumes in the coming years.
Years in the Making: From Negotiations to Breakthrough
Negotiations for the India–EU FTA were re-launched in 2022 after a long pause.
What followed were intense, technically complex and politically sensitive negotiations, reflecting the high ambitions of both sides.
The conclusion of the FTA in 2026 demonstrates:
- Strong political will
- Strategic alignment
- A shared vision for a modern, balanced and future-ready economic partnership
A Defining Achievement for India: Piyush Goyal’s Remarks
Union Minister for Commerce and Industry Shri Piyush Goyal described the agreement as a defining moment in India’s global economic engagement.
He underlined that the India–EU FTA:
- Secures unprecedented market access for Indian exporters
- Strengthens Make in India
- Goes far beyond a conventional trade deal
- Integrates trade, services, mobility, technology and sustainability
With a young, dynamic workforce and one of the world’s fastest-growing major economies, India is now better positioned to:
- Create jobs
- Spur innovation
- Enhance global competitiveness
- Deepen participation in global value chains
Zero-Duty Access: A Massive Boost for Indian Exports
One of the biggest achievements of the India–EU FTA is market access for over 99% of Indian exports by trade value.
Key Highlights:
- Tariffs up to 10% eliminated
- Zero-duty access on nearly USD 33 billion worth of exports
- Immediate benefits upon entry into force of the agreement
Labour-Intensive Sectors Set to Gain:
- Textiles & apparel
- Leather & footwear
- Marine products
- Gems & jewellery
- Handicrafts
- Engineering goods
- Automobiles
This will directly empower:
- Workers & artisans
- Women entrepreneurs
- Youth
- MSMEs
- Export-oriented industries
Automobiles: Carefully Balanced Liberalisation
The agreement includes a calibrated, quota-based automobile liberalisation package:
- EU manufacturers can introduce high-end and premium vehicles in India
- Encourages Make in India manufacturing and future exports
- Indian consumers benefit from advanced technology and competition
- Reciprocal access opens doors for India-made vehicles in EU markets
Agriculture & Food Processing: Growth with Safeguards
The India–EU FTA delivers a transformational opportunity for Indian farmers and agrarian enterprises.
Products Gaining Enhanced Access:
- Tea & coffee
- Spices
- Fresh fruits & vegetables
- Processed foods
At the same time, India has prudently protected sensitive sectors such as:
- Dairy
- Cereals
- Poultry
- Soymeal
- Certain fruits & vegetables
This balanced approach ensures:
- Export growth
- Farmer welfare
- Food security
- Inclusive rural development
Services Trade: India’s Biggest Strategic Win
Services - the fastest-growing and dominant part of both economies - receive a major boost.
Market Access Commitments:
- 144 EU subsectors opened for Indian service providers
- 102 Indian subsectors opened for EU firms
Key Beneficiary Sectors:
- IT & IT-enabled services
- Professional services
- Education
- Financial services
- Tourism
- Construction
- Business services
This ensures predictable, non-discriminatory access and global competitiveness for Indian companies.
Mobility & Talent: Seamless Movement of Professionals
The FTA establishes a facilitative and predictable mobility framework covering:
- Short-term business travel
- Temporary movement
- Intra-Corporate Transferees (ICTs)
- Business Visitors
Additional Gains:
- Entry and working rights for dependents
Commitments for:
- 37 sectors for Contractual Service Suppliers
- 17 sectors for Independent Professionals
- Framework for Social Security Agreements over five years
- Support for student mobility and post-study work
- Recognition for practitioners of Indian Traditional Medicine in EU states where permitted
Digital Trade, Clean Energy & Emerging Technologies
The agreement extends into future-oriented domains, including:
- Digital trade & SMEs
- Artificial Intelligence
- Semiconductors
- Clean technologies
- Green Hydrogen cooperation
CBAM & Climate Commitments:
- Flexibilities under Carbon Border Adjustment Mechanism
- Recognition of carbon pricing systems
- Recognition of verifiers
- Financial and technical assistance to reduce emissions
Intellectual Property & Traditional Knowledge Protection
The FTA:
- Reinforces TRIPS-compliant IPR protections
- Covers copyrights, trademarks, designs, plant varieties and trade secrets
- Affirms the Doha Declaration
- Recognises the Traditional Knowledge Digital Library (TKDL)
- Supports digital libraries and biodiversity protection
“Mother of All Deals”: Key Outcomes List
The visit resulted in 13 major outcomes, covering trade, security, clean energy, mobility, disaster management, research, and connectivity - cementing a comprehensive strategic partnership between India and the EU.
- Strategic Impact for India
- EU becomes India’s 22nd FTA partner
- Along with FTAs with UK and EFTA, India effectively gains access to the entire European market
- Strengthens India’s role as a global manufacturing and services hub
- Reinforces shared democratic values
- Aligns with Viksit Bharat 2047
A New Chapter in India–EU Partnership
The India–EU Free Trade Agreement is not just a trade pact-it is a strategic blueprint for future cooperation in a rapidly changing world.
By embedding review mechanisms, consultation frameworks and response tools, the agreement is designed to remain resilient against future challenges, evolving technologies, and regulatory complexities.
This landmark deal positions India as a trusted, forward-looking and indispensable global partner, while opening a new era of prosperity, innovation and inclusive growth for both India and the European Union.
PM Modi wrote on his X post-
India EU Free Trade Agreement 2026,India EU FTA benefits explained,India EU trade deal Mother of All Deal
Addressing the joint press meet with European Council President António Costa and European Commission President Ursula von der Leyen.@eucopresident @vonderleyen @EUCouncil @EU_Commission https://t.co/0hh4YX8DHe
— Narendra Modi (@narendramodi) January 27, 2026
India EU Free Trade Agreement 2026,India EU FTA benefits explained,India EU trade deal Mother of All Deal
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