EU, India seal landmark trade deal after 20 years of talks
The European Union and India have announced a long-awaited free trade agreement, concluding nearly two decades of intermittent negotiations as both sides seek to strengthen economic ties.
European Commission President Ursula von der Leyen hailed the pact as a major breakthrough, telling journalists in Delhi, News.Az reports, citing BBC.
“We did it, we delivered the mother of all deals.” Indian Prime Minister Narendra Modi described the agreement as “historic.”
The deal will allow free trade in goods between the 27-nation EU and the world’s most populous country. Together, the two sides account for nearly 25% of global gross domestic product and represent a combined market of around two billion people. The agreement is expected to sharply reduce tariffs and significantly expand market access for both economies.
Von der Leyen and European Council President António Costa are in Delhi for a bilateral summit, where they met with Modi to finalize the agreement.
According to the European Commission, the pact will eliminate tariffs on most EU exports in sectors such as chemicals, machinery, and electrical equipment, as well as aircraft and spacecraft, following phased reductions. A key provision concerns the automotive sector: import duties on cars, which currently reach as high as 110%, will be cut to 10% under a quota of 250,000 vehicles. Bloomberg noted that this quota is six times larger than the 37,000-vehicle allowance India granted the UK under a trade deal signed last July.
For India, the agreement is expected to lower the cost of European imports, including cars, industrial machinery, and agricultural and food products, as import duties are reduced. Brussels said the deal would also support cross-border investment, improve access to EU markets, and deepen supply-chain integration between the two partners.
Delhi said that nearly all Indian exports would receive “preferential access” to the EU market. Sectors such as textiles, leather goods, marine products, handicrafts, gems, and jewellery are expected to benefit from reduced or eliminated tariffs.
India added that while exports of tea, coffee, spices, and processed foods would gain from the pact, it has “prudently safeguarded sensitive sectors,” including dairy, cereals, poultry, soy meal, and certain fruits and vegetables, in order to balance export growth with domestic priorities.
Beyond trade in goods, the two sides also agreed on a mobility framework designed to ease short-term travel restrictions for professionals moving between India and the EU.
Calling it India’s largest free trade agreement to date, Modi said the deal would make access to European markets easier for Indian farmers and small businesses, while also boosting the country’s manufacturing and services sectors and strengthening innovative partnerships.
The agreement comes at a time when both India and the EU are facing economic and geopolitical pressure from the United States. India continues to grapple with 50% tariffs imposed last year by U.S. President Donald Trump, as talks on a bilateral India-US trade deal remain unresolved. Meanwhile, Trump last week threatened to escalate a trade dispute with European allies over their opposition to a proposed U.S. takeover of Greenland, before later backing down.
By Nijat Babayev
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