India and the European Union are on the verge of concluding what European Commission President Ursula von der Leyen has described as the “mother of all deals” — a landmark Free Trade Agreement (FTA) that has been nearly 20 years in the making. Speaking at the World Economic Forum in Davos, von der Leyen said negotiations are at a decisive stage, with only a few issues remaining before formal announcement.
Negotiations between India and the EU began in 2007 but stalled in 2013 amid disagreements over tariffs, market access, and regulatory standards. Talks were revived in 2022 and gained fresh urgency due to shifting global geopolitics, growing protectionism in the US, and the shared strategic challenge posed by China’s dominance in global manufacturing.
The FTA is expected to be formally announced at the 16th India–EU Summit on January 27, following the participation of EU leaders as chief guests at India’s Republic Day celebrations. The agreement would link the world’s fastest-growing major economy with one of its most powerful trading blocs, creating a combined market accounting for nearly a quarter of global GDP.
For India, the deal promises improved access to the EU’s integrated market of 27 countries, benefiting sectors such as pharmaceuticals, engineering goods, automotive components, textiles, jewellery, IT services, and renewable energy. It would also reduce dependence on the US and China by opening alternative markets and strengthening supply-chain resilience.
For the EU, the FTA offers access to India’s vast consumer base and long-term growth potential, while enabling diversification of supply chains away from China. European industries ranging from automobiles and machinery to beverages and chemicals stand to gain from reduced tariffs and improved regulatory clarity.
Strategically, the agreement could significantly undermine US President Donald Trump’s “America First” trade approach. By reducing reliance on the US market and creating new competitive advantages for European firms in India, the FTA may weaken US leverage and prompt American companies to push for a reset in trade relations.
As India accelerates its shift toward deeper global integration, the India–EU FTA stands out not just as a trade pact, but as a defining geopolitical and economic milestone in an increasingly multipolar world.
