India-EU seal ‘mother of all deals’

New Delhi: India and the European Union on Tuesday concluded the largest Free Trade Agreement (FTA) in India’s history, a landmark pact Prime Minister Narendra Modi said would create vast opportunities for businesses, farmers, workers and consumers, while anchoring a deeper strategic partnership between the world’s two largest democratic blocs.

Announced at a joint press conference at Hyderabad House with European Commission President Ursula von der Leyen and European Council President Antonio Costa, the agreement comes after 18 years of negotiations and is being hailed by both sides as a decisive response to global economic and geopolitical uncertainty.

In his remarks, Modi said the global order is in “great turmoil” and in such a context, the partnership between India and the EU will strengthen stability in the international system. “Today India has concluded the biggest free trade agreement in its history. “It will facilitate access to the European market for our farmers and small industries, create new opportunities in manufacturing and services sectors,” PM Modi said in his media statement. “This FTA will boost investment between India and the European Union, create new innovation partnerships and strengthen supply chains globally. This means it is not just a trade agreement. This is a new blueprint for shared prosperity,” he said.

Von der Leyen, referring to the defence partnership pact, said Europe and India have chosen to be reliable partners to one another. “We are not only making our economies stronger, we are also delivering security for our people in an increasingly insecure world. And today, the world’s two largest economies and democracies launched their first-ever security and defence partnership,” she said.

Under the pact, tariffs on over 90 per cent of EU goods exported to India will be eliminated or reduced over time. This includes steep duties of up to 44 per cent on machinery, 22 per cent on chemicals and 11 per cent on pharmaceuticals, most of which will be phased out. Duties on EU beer will be cut to 50 per cent, while tariffs on aircraft, spacecraft and a wide range of chemicals will be eliminated for almost all products.

The European Union estimates the FTA could double EU exports to India by 2032, delivering annual duty savings of up to €4 billion. The EU is already India’s largest trading partner in goods, with bilateral trade worth about $136 billion in FY25, including Indian exports of $76 billion. Nearly 17 per cent of India’s total exports currently go to the EU, a share expected to rise sharply under the deal.

Hailing the mega trade deal as the “mother of all deals”, von der Leyen said the India-EU partnership will send a strong message that cooperation is the best answer to global challenges, in remarks that came amid growing strain in ties between Europe and the US.

“We did it. We delivered the mother of all deals. We are creating a market of two billion people,” she said.

“And this is the tale of two giants, the world’s second and fourth largest economies, two giants who choose partnership in a true win-win fashion, a strong message that cooperation is the best answer to global challenges,” she said.

The FTA is expected to generate millions of jobs across India and Europe.