The European Union and India have announced a landmark trade agreement, ending nearly two decades of intermittent negotiations. The deal comes at a time of rising global trade tensions and growing uncertainty surrounding US tariff policies.
European Commission President Ursula von der Leyen described the agreement as a historic moment, calling it the “mother of all deals” in a post shared on X (formerly Twitter). The announcement was made during a high-level bilateral summit held in New Delhi, where EU leaders met Indian Prime Minister Narendra Modi.
A Major Step in EU-India Economic Relations
Von der Leyen, along with European Council President António Costa, is currently on an official visit to India. The leaders met Prime Minister Modi to formalize the understanding reached between the two sides.
The trade agreement is expected to create a free trade zone covering nearly two billion people, significantly expanding market access for businesses in both regions. While the full details of the deal have not yet been released, officials from both sides have emphasized its long-term economic and strategic importance.
Deal Comes Amid US Trade Tensions
The timing of the agreement is notable. Both India and the European Union are seeking to diversify their trade partnerships amid mounting pressure from the United States.
India continues to face 50% tariffs imposed by former US President Donald Trump last year, even as negotiations for a separate India-US trade deal remain unresolved. Meanwhile, the EU has also faced threats of escalating tariffs from Washington in recent weeks.
Just last week, Trump warned of intensifying trade action against European allies over their opposition to a potential US takeover of Greenland, before later stepping back from the threat.
Leaders Send Strong Global Message
In a statement posted on Tuesday, von der Leyen highlighted the broader impact of the agreement.
“We have created a free trade zone of two billion people, with both sides set to benefit. This is only the beginning,” she wrote, adding that the EU and India aim to further strengthen their strategic partnership.
A day earlier, António Costa stressed the political significance of the deal, noting that it sends an important global message at a time when protectionism is on the rise.
Without directly naming the US, Costa said the agreement shows that India and the EU believe in trade agreements rather than tariffs, even as some countries choose to raise trade barriers.
Strategic and Geopolitical Importance
Beyond economics, the deal underscores a deepening strategic alignment between India and the European Union. Both sides are increasingly looking to collaborate on issues such as supply chain resilience, geopolitical stability, and global trade governance.
The agreement also reflects India’s growing role as a key global economic player and the EU’s efforts to strengthen ties in the Indo-Pacific region.
Formal Signing Still Pending
While the deal has been politically agreed upon, the formal signing is expected later this year. The agreement will need approval from the European Parliament and the European Council before it officially comes into force.