India and the European Union on Tuesday concluded a landmark Free Trade Agreement, bringing to a close negotiations that began in 2007. The deal, widely described as the “mother of all agreements,” spans roughly 25% of global GDP and nearly one-third of worldwide trade.
Speaking at the opening of India Energy Week 2026, Prime Minister Narendra Modi said the agreement marked a major milestone for both economies. He noted that the pact is expected to unlock significant opportunities for businesses and citizens across India and Europe.
Modi said the trade deal would provide a strong boost to manufacturing while also accelerating growth in the services sector. He added that the agreement is set to improve investor confidence and encourage greater foreign investment into India.
The prime minister highlighted that the EU pact complements India’s existing trade arrangements with the United Kingdom and the European Free Trade Association. He said the agreement reflects shared values such as democracy and the rule of law, and congratulated the people of India on the achievement.
Trade between India and the EU reached $136.5 billion in the fiscal year ending March 2025. Combined, the two account for close to one-fifth of global trade and around a quarter of the world’s population.
Alongside the trade pact, India and the EU also formalized a new Security and Defence Partnership. Defence Minister Rajnath Singh and the chiefs of India’s armed forces met with a senior EU delegation led by Kaja Kallas at the Defence Ministry in New Delhi.
The partnership is expected to be formally signed at the 16th India-EU Summit in New Delhi. The summit will be co-chaired by Modi, Antonio Costa, and Ursula von der Leyen, with leaders set to adopt a joint comprehensive strategic agenda.
The flurry of agreements highlights broader global efforts to diversify economic and strategic ties amid rising uncertainty around the United States. President Donald Trump’s threats of higher tariffs on European nations and his bid to take over Greenland have strained traditional alliances.
Trump has already imposed a 50% tariff on Indian goods, while negotiations on an India-U.S. trade agreement collapsed last year following communication breakdowns between the two governments.
The India-EU deal follows closely on the EU’s recent agreement with Mercosur and comes after India finalized trade pacts with the United Kingdom, New Zealand, and Oman.
