EU, India seal historic free trade pact after 20-year talks

EU, India seal historic free trade pact after 20 years of talks

The European Union and India have announced a landmark free trade agreement, ending nearly two decades of on again off again negotiations and signalling a major shift in global trade alliances as both sides navigate rising tensions with the United States.

Ursula von der Leyen, European Commission president, described the agreement as transformative. “We did it. We delivered the mother of all deals,” she said at a media briefing in New Delhi. Narendra Modi, the Indian prime minister,  called it “historic”, saying it would unlock vast opportunities for people and businesses on both sides.

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The deal creates a free trade zone covering nearly two billion people across the 27 member European Union and India, the world’s most populous country. Together, they account for about a quarter of global gross domestic product, making the pact one of the most significant trade agreements ever concluded.

Under the agreement, most goods traded between India and the EU will move freely, with major tariff cuts across sectors. India will see improved access to European markets for textiles, leather goods, marine products, handicrafts, gems and jewellery, while the EU will benefit from reduced Indian tariffs on products such as wine, beer and olive oil.

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“This deal will bring many opportunities for India’s 1.4 billion people and the many millions of people of the EU,” Modi said, adding that it would boost manufacturing, services and innovation partnerships, while helping farmers and small businesses reach European consumers more easily.

EU officials said the agreement was the most ambitious trade deal India has ever signed. Brussels believes European companies will gain a first mover advantage in India’s vast and fast growing market, while New Delhi sees Europe as a key source of technology, investment and long term capital.

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Beyond trade, the pact includes a mobility framework to ease short term travel for professionals and a joint security partnership, reflecting a broader effort to deepen strategic ties.

The agreement comes as both sides seek new markets amid global economic pressure. India is still grappling with steep tariffs imposed by United States president Donald Trump last year, while the EU is facing trade uncertainty linked to American tariffs and Chinese export controls.

Some analysts caution that challenges lie ahead, particularly around compliance with strict EU standards. Economist Mitali Nikore speaking the BBC  said India’s manufacturers would need to adapt to tough European rules, especially on environmental issues. “The EU has very strict regulations, for instance on the environment,” she said. “It is an opportunity more than a challenge, but India must prepare for it.”

For Europe, the deal offers greater certainty in an era of economic coercion and global instability. Germany and France are expected to be among the biggest beneficiaries, though experts say the agreement is best seen as a foundation rather than the final word in EU India economic relations. As von der Leyen put it in a post during her visit to Delhi, “We are making history today.”

Faith Omoboye is a foreign affairs correspondent with background in History and International relations. Her work focuses on African politics, diplomacy, and global governance.

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