India and European Union Conclude Landmark Free Trade Agreement

The Government of India and the European Union have concluded negotiations for a comprehensive Free Trade Agreement (FTA), described by officials as the "mother of all deals." Jointly unveiled in January 2026 by Prime Minister Narendra Modi and European Commission President Ursula von der Leyen, the 1,000-page pact aims to integrate the world's second and fourth largest economies. The agreement will reduce or eliminate tariffs on approximately 99.5% of Indian exports to the EU and 96.6% of EU exports to India, specifically benefiting labor-intensive sectors like textiles, leather, and pharmaceuticals.

Negotiators, including India's Darpan Jain and the EU's Christophe Kiener, have rejected claims that the deal was accelerated by the trade policies of U.S. President Donald Trump, citing long-term strategic interests and supply chain lessons from the pandemic and the war in Ukraine. Beyond tariffs, the deal includes provisions for digital trade, intellectual property, and Most-Favoured-Nation status for service providers for an initial five-year period. It also establishes a framework to address the EU's Carbon Border Adjustment Mechanism.

Recent developments in July 2026 include the third Trade and Technology Council meeting in Brussels, where India's Piyush Goyal and EU officials agreed on an action plan for semiconductors, artificial intelligence, and digital public infrastructure. While the FTA is currently in the legal vetting phase and expected to be signed later in 2026, EU Ambassador Herve Delphin has urged the addition of an investment liberalization chapter. Implementation is slated for early 2027.