The European Union and India have finalised a trade agreement after nearly 20 years of intermittent negotiations, to strengthen economic and strategic ties amid growing global competition and geopolitical tensions.
European Commission President Ursula von der Leyen hailed the agreement as a major achievement at a press briefing in Delhi.
“We did it, we delivered the mother of all deals,” she said
Indian Prime Minister Narendra Modi described the pact as “historic”, emphasizing its transformative impact on trade and investment.
The agreement will enable largely tariff-free trade of goods and services between the EU’s 27 member states and India, together representing nearly 25% of global GDP and a combined market of around two billion people.
The agreement will gradually eliminate tariffs on most European exports, including chemicals, machinery, electrical equipment, aircraft, and spacecraft, opening the door for deeper trade integration between the EU and India.
A major highlight is the reduction of tariffs on European motor vehicles, which currently face duties as high as 110% in India.
Under the deal, these tariffs will drop to 10% within a quota of 250,000 vehicles annually, a significant increase compared with the 37,000-unit quota granted to the UK in its recent trade deal.
India, in turn, will gain preferential access for nearly all of its exports to the EU, with sectors such as textiles, leather, marine products, handicrafts, gems, and jewelry benefiting from reduced or eliminated tariffs.
The Indian government has prudently protected sensitive domestic sectors, including dairy, cereals, poultry, soy meal, and select fruits and vegetables, ensuring that export growth does not compromise local food security and production priorities.
The deal also targets consumer goods, with tariffs on EU wine, beer, and olive oil set to decrease, supporting greater trade in European food and beverages.
Beyond tariffs, the agreement is expected to strengthen investment flows, supply-chain integration, and market access, fostering closer economic collaboration between the two regions.
Finally, the pact includes a mobility framework that eases short-term travel for professionals between India and EU countries, encouraging exchanges of expertise and talent while reinforcing bilateral cooperation in sectors ranging from manufacturing to technology and services.
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