After nearly two decades of on-and-off talks, India and the European Union have finally concluded their free trade agreement.
Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen jointly announced the conclusion of the India-European Union Free Trade Agreement at the 16th India-EU Summit on Jan 27, 2026.
The deal represents a strategic breakthrough in India’s global trade engagement. Billed as the “Mother of All Deals”, the deal marks a partnership between India, the 4th largest economy, and the EU, the 2nd largest economy.
India and the EU account for nearly 1/5th of global trade and about 25% of the world’s population.
As per the official Indian press release, with the FTA the two sides seeks to “create jobs, spur innovation, unlock opportunities across sectors, and enhance its competitiveness on the global stage.”
The most striking deal of the FTA pertains to the auto sector. India will gradually lower tariffs on European cars to 10%, marking a significant drop from the duties that often touch 70%.
Additionally, tariffs on more than 90% of EU goods coming to Indian will either be eliminated or reduced. Brussels is already expecting that the deal will double EU exports to India by 2032.
These include tariffs on wine and beer, medical and surgical equipment, and vegetable oils from the EU are also headed to lower figures.
