India and the European Union have sealed a long-awaited Free Trade Agreement (FTA), ending nearly two decades of negotiations and marking one of the most significant trade breakthroughs for New Delhi. Dubbed the “mother of all deals,” the pact is being seen as a strategic win for India at a time when global trade is being reshaped by protectionism, shifting alliances, and tariff wars.
The agreement aims to sharply reduce or eliminate tariffs on the majority of goods traded between India and the 27-nation EU. Together, the two sides account for about a quarter of global GDP, making the deal economically powerful and geopolitically important. Once implemented, it is expected to boost trade, investment, and job creation across both regions.
For India, the biggest gains are expected in labour-intensive sectors such as textiles, leather, gems and jewellery, engineering goods, and marine products, which will get easier access to European markets. Indian exporters see the deal as a chance to scale up operations and improve competitiveness, especially as demand weakens in some traditional markets.
In return, India has agreed to gradually open its market to select European goods, including automobiles, machinery, wines, chocolates, and premium industrial products. These tariff cuts will be phased in over several years, giving domestic industries time to adjust and protecting sensitive sectors.
The pact also goes beyond goods. It strengthens cooperation in services, investments, and skilled workforce mobility, areas where India believes it holds a clear advantage. This aspect of the deal has drawn attention internationally. Reacting to the agreement, a senior aide to US President Donald Trump remarked that India appears to have “come out on top.” The comment reflects a view within US trade circles that New Delhi negotiated from a position of strength and secured favourable terms compared to its European partner.
The deal has taken shape amid rising global trade tensions, particularly the US push for higher tariffs and inward-looking trade policies. Analysts say this environment accelerated India–EU talks, as both sides looked to diversify partnerships and reduce dependence on uncertain markets.
However, the agreement is not yet a finished chapter. It still needs approval from India’s cabinet, EU member states, and the European Parliament before coming into force, likely in 2026–27.
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