India, EU finalise landmark free trade deal

Dar es Salaam. India and the European Union have finalised a landmark free trade agreement, Prime Minister Narendra Modi said on Tuesday, as both sides seek to cushion themselves against unpredictable trade relations with the United States.

After nearly two decades of intermittent negotiations, the deal will open up India’s vast and traditionally protected market, the world’s most populous, to freer trade with the 27-nation European bloc, its largest trading partner.

“Yesterday, a major agreement was signed between the European Union and India,” Mr Modi said.

“People around the world are calling this the mother of all deals. It will create huge opportunities for the 1.4 billion people of India and millions of Europeans,” he added.

Mr Modi and European Commission President Ursula von der Leyen are expected to formally announce the agreement and its details at an India, EU summit in New Delhi later on Tuesday.

Trade between India and the EU stood at $136.5 billion in the financial year ending March 2025.

The agreement comes days after the EU signed a major trade pact with the South American bloc Mercosur, following similar deals last year with Indonesia, Mexico and Switzerland. During the same period, India also concluded trade agreements with Britain, New Zealand and Oman.

The wave of trade deals reflects growing global efforts to reduce dependence on the United States, as President Donald Trump’s renewed tariff threats against European countries and his bid to take over Greenland strain long-standing Western alliances.

Mr Trump has imposed a 50 percent tariff on goods from India, while an India, US trade agreement collapsed last year following a breakdown in talks between the two governments.

An Indian government official said the formal signing of the India, EU deal will take place after legal vetting expected to last five to six months.

“We expect the agreement to be implemented within a year,” the official said.