PM Modi announces India-EU FTA conclusion, says deal represents one-third of global trade

Prime Minister Narendra Modi on Tuesday announced the conclusion of the talks for a free trade agreement (FTA) with the European Union, saying it will give a major boost to manufacturing and services and open up vast opportunities for investors and businesses.

Addressing the fourth edition of India Energy Week (IEW) 2026 through video conferencing, the prime minister described the pact as the “mother of all deals” and that it represents nearly 25% of global GDP and about one-third of global trade.

“Just yesterday, a very significant agreement was reached between India and the European Union. People around the world are calling it the ‘mother of all deals’,” Modi said.

The prime minister asserted that the trade pact will significantly boost manufacturing, expand the services sector and strengthen investor confidence in India.

“This agreement also strengthens our shared commitment towards democracy and rule of law,” he said, adding that it will complement India’s trade agreements with Britain and the European Free Trade Association (EFTA).

Commerce Secretary Rajesh Agrawal was the first to confirm that India and the European Union have concluded official-level negotiations for the long-pending FTA.

“Official-level negotiations are being concluded and both sides are all set to announce the successful conclusion of FTA talks on January 27,” Agrawal told reporters on Monday.

He said the negotiations have been successfully concluded and the pact finalised, with legal scrubbing of the text currently underway.

The trade deal is expected to be signed later this year and may come into effect early next year. While the agreement will require approval from the European Parliament, in India it will need the nod of the Union Cabinet.

The FTA negotiations, which began in 2007, were finalised after 18 years.

The formal announcement of the conclusion of talks is expected at the India–EU Summit here on Tuesday, where European Commission President Ursula von der Leyen and European Council President Antonio Costa will hold talks with Prime Minister Modi.

The pact is expected to provide duty-free access to several Indian goods, particularly from labour-intensive sectors such as textiles, chemicals, gems and jewellery, electrical machinery, leather and footwear.

Under an FTA, both sides typically reduce or eliminate import duties on over 90% of goods traded.

Since 2014, the NDA government has finalised seven trade pacts with Australia, the UK, Oman, New Zealand, the UAE, the EFTA bloc and Mauritius.

The India–EU FTA assumes added significance amid disruptions in global trade due to high tariffs imposed by the US, which have hit Indian exports. The pact is expected to help Indian exporters diversify markets and reduce dependence on China.

India’s bilateral trade in goods with the EU stood at USD 136.53 billion in 2024–25, with exports worth USD 75.85 billion and imports of USD 60.68 billion, making the EU India’s largest trading partner in goods. Services trade between the two sides was valued at USD 83.10 billion in 2024.

India recorded a trade surplus of USD 15.17 billion with the EU during 2024–25. The bloc accounts for about 17% of India’s total exports, while exports to India make up around 9 per cent of the EU’s total overseas shipments.