New Delhi: India and the European Union on Tuesday sealed a historic free trade agreement, bringing to a close nearly 18 years of negotiations and creating one of the world’s largest economic partnerships, spanning close to two billion people.
Prime Minister Narendra Modi announced the breakthrough alongside European Commission President Ursula von der Leyen and European Council President António Costa at the 16th India-EU Summit at Hyderabad House in New Delhi. Calling it a “historic milestone”, Modi said the pact marked a defining moment in ties between the two sides and showcased how major economies can work together on the global stage.
“Today is a day that will be remembered forever, marked indelibly in our shared history,” Modi said, adding that the agreement would strengthen economic ties, create jobs, open new opportunities for businesses and build resilient global supply chains.
In his address, the Prime Minister said the deal opens new pathways for growth, investment and strategic cooperation. “This agreement will drive trade, investment and innovation while strengthening our strategic relationship. It reflects our shared resolve to shape a stable, prosperous and future-ready economic partnership,” he said.
European Commission President Ursula von der Leyen described the agreement as “mother of all deals” and said Europe and India had created a free trade zone of two billion people, with both sides set to benefit. She said the pact was only the beginning of a much deeper strategic relationship.
According to the EU, the agreement will save its exporters around EUR4 billion annually in duties as India cuts or removes tariffs on nearly 97 percent of goods imported from Europe. On the Indian side, Commerce and Industry Minister Piyush Goyal said the pact offers “unprecedented” access to the EU market at concessional duties for over 99% of India’s exports by value, providing a major boost to labour-intensive sectors such as textiles, leather, gems and jewellery.
Media reports say the deal slashes tariffs across a wide range of products. Duties on machinery, electrical equipment, aircraft, pharmaceuticals, chemicals, plastics, iron and steel will fall to zero for most items. Tariffs on processed foods such as biscuits, pasta and chocolate will also be eliminated. In a sensitive sector, motor vehicle duties, currently as high as 110 percent, will be reduced to 10% under a quota system.
Leaders said the agreement represents nearly a quarter of global GDP and about one-third of world trade, positioning the India-EU corridor as a central pillar of global supply chains at a time of economic uncertainty.
The summit also delivered a Security and Defence Strategic Partnership, signalling deeper cooperation on maritime security, counter-terrorism and the protection of a rules-based international order. Defence Minister Rajnath Singh and the three service chiefs joined the talks, highlighting the strategic weight of the new framework and the opening of European defence programmes to Indian firms.
With this agreement, India adds another major trade pillar after recent pacts with other partners, anchoring itself firmly in global commerce. For both sides, the deal goes beyond tariffs, laying the foundation for long-term economic integration, technological cooperation and strategic alignment in a changing world.
