India’s Commerce Secretary Rajesh Agarwal said on Monday that negotiations had been concluded and the deal finalised. European Commission President Ursula von der Leyen and European Council President António Luís Santos da Costa are currently in Delhi, where the announcement is expected.
Both sides are looking to strengthen global partnerships as they face economic and geopolitical pressure from Washington. India has been dealing with 50 percent tariffs imposed by US President Donald Trump last year, while talks on a separate India US trade agreement continue to drag on.
The EU has also faced strain after Trump recently threatened to escalate a trade dispute with European allies over their opposition to a US takeover of Greenland, before later stepping back.
Speaking on Monday, Costa said the agreement would send an important political signal that India and the EU believe in trade agreements rather than tariffs at a time when protectionism is rising globally. Von der Leyen said Europe and India were committed to working together to shape a new global order.
Von der Leyen and Costa arrived in Delhi over the weekend and were chief guests at India’s Republic Day celebrations on Monday. They are scheduled to meet Prime Minister Narendra Modi on Tuesday and attend a bilateral summit, after which the deal is expected to be formally announced.
The agreement will still require approval by the European Parliament and the European Council, with formal signing likely later this year.
The deal is expected to expand market access for Indian exports to Europe while easing entry for European investments and goods, including automobiles and beverages, into Asia’s third largest economy. Speaking at the India Energy Week conference on Tuesday, Modi said the agreement represented a partnership between two major global economies and covered about a quarter of global GDP and one third of global trade.
The EU is India’s largest trading partner in goods, with bilateral merchandise trade reaching 136 billion dollars in the 2024 to 2025 financial year, nearly double the level of a decade ago.
Trade talks between the two sides began in 2007 but stalled in 2013 over differences related to market access and regulatory issues. Negotiations were formally revived in July 2022. Key sticking points included access to India’s automobile and agriculture markets and disputes over carbon related tariffs.
Officials from both sides worked intensively in recent days to resolve remaining chapters of the agreement ahead of the EU leaders’ visit. Von der Leyen and India’s commerce minister Piyush Goyal have previously described the agreement as the “mother of all trade deals”.
The deal comes as both Delhi and Brussels look to secure alternative markets for exporters. In recent months, India has signed major trade agreements with the UK, Oman and New Zealand, while a pact with the European Free Trade Association bloc has also come into effect. Earlier this month, the EU concluded a long running trade agreement with the South American Mercosur bloc after 25 years of negotiations.
