European Union and Indian leaders have announced a comprehensive trade agreement on Tuesday after nearly twenty years of intermittent negotiations, which gained momentum in the past six months following the imposition of heavy tariffs by U.S. President Donald Trump.
Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen described it as “the mother of all deals.”
Modi highlighted that the trade pact is the largest and most inclusive agreement India has ever inked, accounting for one-third of global trade.
The free trade deal reduces tariffs on almost 97% of European goods imported to India by value, with expectations of doubling EU exports to India by 2032.
“We are establishing a market of two billion people,” remarked von der Leyen during the announcement.
“This is a story of two major economies, the world’s second and fourth largest, opting for a partnership in a mutually beneficial manner.”
India and the European Union have struck a long‑delayed trade deal that will slash tariffs on most goods, aiming to boost two‑way trade and reduce reliance on the U.S.
The announcement of this significant deal followed India’s annual Republic Day military parade, where von der Leyen and European Council President António Costa were honored guests. It is an occasion when Indian leaders often hint at their strategic priorities.
Opening India’s protected domestic market
The agreement will dismantle India’s historically high trade barriers and unlock its closely guarded domestic market for various goods, including European automobiles.
Tariffs on European car imports from companies like Volkswagen, Renault, and Mercedes-Benz will be reduced to 10% from the current levels as high as 110% on certain vehicles.
India has also agreed to lower duties on European wine, chocolates, olive oil, and other items.
In return, New Delhi will benefit from waived tariffs on textiles, leather products, gems, jewelry, and other goods entering the EU, with the pact ensuring smoother access for highly skilled Indian professionals to work in Europe — a significant advantage for the country’s workforce.
Von der Leyen stated that the deal sends a “strong message that cooperation is the best response to global challenges,” reducing strategic dependencies at a time when trade is increasingly weaponized.
Negotiations amid Trump tariffs, Ukraine conflict
The worldwide challenge that many nations face is the unpredictable trade policy of the Trump administration, which expedited talks between EU leaders and New Delhi.
“The progress we’ve witnessed is all thanks to President Trump,” noted Praveen Donthi
