India and the European Union (EU) are close to finalising a historic Free Trade Agreement (FTA) after nearly 18 years of negotiations. This marks a major step in strengthening economic ties between two of the world’s largest economies.
Prime Minister Narendra Modi welcomed the development, calling the agreement the “mother of all deals” and saying it will bring huge opportunities for businesses and people in both regions.
Speaking at an energy event earlier today, PM Modi said the trade pact will boost India’s manufacturing sector and strengthen services industries.
“This landmark agreement will create tremendous opportunities for India’s 1.4 billion people and millions across Europe,” he said. “It will complement the India-UK trade deal and support economic growth on both sides.”
Deal Expected to Be Announced at India-EU Summit
The agreement is likely to be officially announced at the India-EU Summit on January 27, 2026, where PM Modi will meet:
- European Council President Antonio Costa
- European Commission President Ursula von der Leyen
The trade pact will be part of a broader package of agreements, including cooperation on:
- Energy
- Mobility of professionals
- Security and defence
Talks Conclude After Nearly Two Decades
Negotiations for the India-EU FTA began in 2007 but were paused several times due to disagreements over:
- Market access for European dairy and farm products
- Environmental rules
- Investment conditions
- Immigration and mobility issues
After being stalled between 2014 and 2022, talks resumed with a practical approach. Both sides set aside areas where agreement was difficult and focused on balanced outcomes.
Commerce Secretary Rajesh Agrawal confirmed that official-level talks were completed on January 23, 2026, and that both sides approved them the next day.
“The deal has been finalised and is ready to be announced,” he said, adding that legal review of the text is currently underway.
Union Commerce Minister Piyush Goyal also described the pact as the biggest trade agreement India has ever signed.
What Happens Next?
Once announced:
- Legal teams will complete a final review
- The agreement will be translated for all 27 EU member states
- The European Parliament must approve it
- In India, the Union Cabinet will give final clearance
Officials expect the deal to come into force early next year, although regulatory processes in Europe may take time.
Major Boost to Trade and Investment
Currently, trade between India and the EU exceeds $136 billion. The new agreement is expected to increase this figure.
Because the EU operates as a single customs union, the deal will rank among the largest bilateral trade agreements in the world.
It is also expected to deepen strategic cooperation between India and the EU, especially in:
- Cyber security
- Maritime security
- Counterterrorism
- Defence collaboration
Indian Industries Set to Benefit
Once implemented, the FTA is likely to provide duty-free access for many Indian products in European markets.
Sectors expected to gain the most include:
- Textiles and garments
- Chemicals
- Gems and jewellery
- Electrical machinery
- Leather goods and footwear
These industries employ millions of workers and could see growth in exports.
A Turning Point in India-EU Relations
The conclusion of the FTA marks a turning point in India-EU relations, strengthening economic cooperation and strategic partnership.
After nearly two decades of effort, the agreement is expected to play a key role in boosting trade, investment, and long-term collaboration between India and the EU.
