India – EU FTA Concluded, to be Announced on Tuesday

Manas Dasgupta

NEW DELHI, Jan 26: India and the European Union have successfully completed negotiations for a Free Trade Agreement, termed as the “Mother of All Deals,” to be officially announced on Tuesday that would propel trade and deeper economic integration between the two sides, Commerce Secretary Rajesh Agrawal confirmed on Monday.

“The deal will come into force sometime next year. Legal scrubbing of the text will take 5-6 months; formal signing will be done post that,” Mr Agrawal said. Commerce and Industry Minister Piyush Goyal had recently referred to the FTA as the “mother of all deals.”

Mr Agrawal said the FTA was a “balanced and forward-looking deal.” Separately, sources in the Commerce Ministry said negotiations concluded on Friday and that the deal was approved by both the sides on Saturday. “Negotiations on the deal are completed. The leaders of both sides will tomorrow sign a document signifying the closure of negotiations,” Mr Agrawal said.

Sources also said this would be “one of the biggest” bilateral deals in the world since the countries in the EU acts as a single customs bloc, unlike other groupings such as the Association of Southeast Asian Nations, in which each country sets its own customs duties.

India saw a total merchandise trade with the EU worth $136.5 billion in the financial year 2024-25, up 0.9% over the previous year. However, within this, India’s exports to the grouping contracted 0.1% while imports grew 2.2%. Sources say that the FTA would help Indian exporters rebalance this trade as it entails several concessions for Indian goods.

European Council President Antonio Costa and European Commission President Ursula von der Leyen are in New Delhi on Monday as chief guests for the 77th Republic Day and to participate in the 16th India-EU Summit. The Prime Minister Narendra Modi said India was privileged to host the leaders, adding that the presence of the EU delegation underscores the growing strength of their partnership.

In a post on X, the commission said, “Our partnership is built on a shared goal to tackle the world’s greatest challenges. As we look forward to tomorrow’s EU-India Summit, we are ready to take our next step together.”

European Union Trade Commissioner Marcos Sefcovic said the long-awaited agreement could significantly open the Indian market to European firms. He noted that negotiators were are “checking their final numbers” as the European bloc pushes to reduce India’s steep import duties, which can reach up to 150% in some sectors.

According to Sefcovic, the agreement would create a free trade area encompassing roughly 2 billion people and lift many Indian customs duties on European goods, although sensitive sectors would be excluded to focus on “the positive outcome.” “This is the largest trade deal ever,” he said, highlighting that around 6,000 European companies already operate in India; and trade between the two partners has surged significantly over the past decade.

Brussels views the deal as a strategic move to diversify its trade ties beyond the United States and China while Indian officials have signalled willingness to open markets to foreign investment and goods in key areas.

Vice-President of the European Commission, Kaja Kallas, also signalled strong momentum in EU-India relations spanning trade, security and defence cooperation. She said in a post on X that the EU was seizing the opportunity to deepen ties. She also noted that personnel from EU naval operations Atalanta and Aspides participated in India’s Republic Day parade for the first time.