From Stability to Strategic Power: How the EU FTA Redefines India’s Global Role
India and the European Union concluded a landmark Free Trade Agreement (FTA) on January 27, 2026.
Leaders announced this at the 16th India-EU Summit in New Delhi.
Prime Minister Narendra Modi and European Commission President Ursula von der Leyen hailed it as the “mother of all deals.”
Negotiations spanned nearly two decades, starting in 2007, suspended in 2013, and relaunched in 2022.
The final round occurred in October 2025, followed by technical discussions.
This FTA covers goods, services, investment, and regulatory cooperation.
It creates a market for nearly 2 billion people and about 25% of global GDP.
Bilateral trade already reached around €120-180 billion in recent years.
The deal aims to double EU exports to India by 2032.
EU will eliminate or reduce tariffs on over 96.6% of its goods exports to India by value.
This includes autos, machinery, chemicals, pharmaceuticals, agri-food products, and aircraft.
EU expects annual savings of about €4 billion in duties for European exporters.
India will provide preferential access for over 99% of its exports by trade value.
Tariffs drop to zero immediately for many items, especially labor-intensive sectors.
Textiles and apparel gain zero duty across all tariff lines.
Gems, jewellery, leather, chemicals, rubber, base metals, and marine products also benefit significantly.
Services sector sees improved access and professional mobility provisions.
Indian tariffs on EU cars will gradually fall from up to 110% to as low as 10-40% in phases.
Pharmaceuticals from EU face mostly eliminated duties (from 11%), phased over 5-10 years.
Sensitive areas like agriculture and dairy remain partially protected with quotas or slower reductions.
The agreement promotes rules-based trade amid geopolitical tensions and supply chain shifts.
It strengthens ties beyond trade, including security and defense partnerships.
The deal awaits ratification by the European Parliament, EU member states, and Indian processes.
It may enter into force in 2026 after legal scrutiny.
Overall, this FTA marks a strategic breakthrough.
It boosts competitiveness, diversifies exports, and reduces vulnerabilities for both sides.