India-EU finalise historic trade deal

India and the European Union have finalised a historic free trade agreement, ending 18 years of negotiations. Indian prime minister Narendra Modi described the deal as the ‘mother of all deals’.

The announcement came on Tuesday in New Delhi during the 16th India-EU summit, marking a major step in strengthening trade and strategic ties between two of the world’s largest economies. Modi said the agreement represents nearly 25 percent of global GDP and one-third of global trade.

The deal is expected to give a major boost to India’s manufacturing and services sectors. Labour-intensive industries such as garments and textiles, gems and jewellery, leather goods and seafood will gain duty-free access to European markets.

Currently, Indian garments face tariffs of around 10 percent in Europe, which will be reduced to zero, making Indian exporters more competitive than rivals such as Bangladesh and Vietnam. Modi said the agreement also reinforces shared commitments to democracy and the rule of law.

European Commission president Ursula von der Leyen described the deal as balanced and forward-looking. She attended India’s 77th Republic Day parade as chief guest, reflecting deep diplomatic ties.

Under the agreement, European countries will gain greater access to the Indian market for automobiles and advanced machinery, while sensitive sectors such as agriculture and dairy will remain excluded or see gradual tariff reductions.

The agreement also includes a mobility chapter to ease visas and short-term travel for Indian IT professionals, engineers and researchers. Commerce secretary Rajesh Agarwal said the text will now undergo legal scrutiny, with full implementation expected from early 2027.