**New Delhi, India** – In a significant diplomatic and economic development, India and the European Union have formally concluded a comprehensive free-trade agreement, a pact described by European Commission President Ursula von der Leyen as the "mother of all deals." This long-anticipated accord, finalized after nearly two decades of protracted negotiations, not only promises to reshape bilateral commerce but also establishes a robust security and defense partnership, signalling a strategic recalibration for both blocs in an increasingly volatile global landscape.
The announcement, made on a Tuesday in the Indian capital, marks a watershed moment, culminating years of intricate discussions aimed at fostering deeper economic integration. The agreement, which requires subsequent legal scrutiny and ratification by the European Parliament—a process expected to take approximately six months—is poised to create a free trade zone encompassing two billion people and accounting for nearly a quarter of global GDP. This ambitious undertaking is projected to substantially bolster trade flows, with EU exports to India anticipated to double by 2032, a testament to the burgeoning economic dynamism of Asia’s fastest-growing major economy.
The rationale behind this monumental pact is multifaceted. For the European Union, it represents a strategic imperative to diversify its economic dependencies, mitigating reliance on both the United States and China. By forging closer ties with India, the EU seeks to anchor its economic future with a key Asian partner, learning valuable lessons from past geopolitical and trade turbulence. India, in turn, aims to shed its protectionist image, counter the impact of U.S. tariffs on its labour-intensive exports, and solidify its expanding global influence. The overarching objective is to cultivate greater stability, prosperity, and security on a global scale through enhanced cooperation.
The economic provisions of the agreement are far-reaching. India has committed to eliminating or substantially reducing tariffs on 96.6% of goods imported from the EU. Concurrently, the EU will phase out or lower duties on 99.5% of Indian imports over a seven-year period. A particularly noteworthy aspect is the preferential access granted to EU car manufacturers, who will be able to export up to 250,000 vehicles annually under significantly reduced duties, a quota six times larger than those in recent comparable agreements. Existing tariffs on motor vehicles, which can reach as high as 110%, will be brought down to 10% within this quota. Furthermore, India will liberalise tariffs on key European products such as wine, beer, and olive oil, while duties on a broad spectrum of industrial goods, including chemicals, machinery, electrical equipment, aircraft, and spacecraft, will be phased out. India will also extend "preferential access" to almost all of its exports entering the EU market. Beyond goods, the pact includes substantial concessions across 144 service sectors and establishes a mobility framework designed to ease short-term travel for professionals between India and the EU, with provisions for student mobility and post-study visas.
However, the agreement is not without its carefully delineated exclusions. India has successfully safeguarded its sensitive domestic sectors, including dairy, cereals, poultry, soy meal, and certain fruits and vegetables, ensuring these remain protected from immediate liberalisation.
Complementing the economic dimension, the newly forged security and defense partnership underscores a shared commitment to regional stability. This collaboration will encompass joint military production, the secure exchange of classified information, and enhanced coordination in the strategically vital Indian Ocean region. This dual focus on economic and security cooperation signals a profound deepening of the India-EU relationship, promising to yield tangible benefits for businesses, consumers, and geopolitical stability alike. As European Commission President von der Leyen aptly stated, "When India succeeds, the world is more stable, more prosperous, and more secure. Cooperation is the best answer to global challenges." The full impact of this "mother of all deals" will undoubtedly unfold in the years to come, reshaping trade dynamics and geopolitical alignments.