India and European Union Sign Free Trade Agreement Unlocking Unprecedented Market Access, Strategic Mobility
India and the European Union formally concluded negotiations for a historic Free Trade Agreement (FTA) during the 16th India–EU Summit in New Delhi on January 27, 2026. The announcement was made by Prime Minister Narendra Modi, European Commission President Ursula von der Leyen, and European Council President António Costa during the EU leaders’ official visit to India. The FTA marks the largest and most ambitious trade deal ever signed by India, covering over 99% of Indian exports by trade value and establishing preferential access to the European market for a broad range of goods and services.
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| Image Source: Kaja Kallas |
The FTA is designed as a modern, rules-based framework that provides certainty for businesses, strengthens global supply chains, and supports India’s domestic development priorities.
During the summit, leaders signed a comprehensive strategic roadmap titled “Towards 2030: A Joint India–EU Strategic Agenda,” outlining cooperation across trade, clean energy, digital governance, mobility, and defence.
Alongside the FTA, India and the EU announced the launch of a new Security and Defence Partnership, an agreement to begin negotiations on a Security of Information Agreement, and the establishment of a Green Hydrogen Task Force.
Memoranda of understanding were also signed on mobility, advanced electronic signatures, and disaster management cooperation.
In his official remarks, Prime Minister Modi called the FTA “a new blueprint for shared prosperity,” noting that the agreement would open new opportunities for Indian farmers, MSMEs, and manufacturers while accelerating investment flows and technological innovation.
Von der Leyen described the deal as “the mother of all trade agreements,” citing the EU’s strategic pivot toward Asia in light of shifting geopolitical dynamics and growing trade uncertainty with the United States.
The FTA grants India preferential access to the European market across 97% of tariff lines, covering nearly all of India’s labour-intensive exports including textiles, leather, marine products, gems and jewellery, and processed foods.
In return, India will reduce or eliminate tariffs on 92.1% of its tariff lines, opening up its market to European high-technology goods, services, and sustainable products.
Both parties have built in safeguards for sensitive sectors such as dairy, cereals, poultry, and certain agricultural goods.
The services sector is a major component of the agreement. India secured binding commitments from the EU across 144 services subsectors, including IT, professional services, education, and business services, with expanded opportunities for Indian professionals through a new mobility framework.
The EU, in turn, gained access to 102 subsectors within the Indian market. Provisions also allow for mutual recognition of professional qualifications, simplified visa regimes, and commitments on student mobility and post-study work opportunities.
The agreement also paves the way for traditional Indian medicine practitioners to operate in EU member states where local regulations do not prohibit it, and supports the establishment of AYUSH wellness centers in Europe.
In intellectual property, the deal affirms TRIPS-compliant protections, encourages technology exchange, and formally recognises India’s Traditional Knowledge Digital Library (TKDL).
Defence cooperation was formalised through a new India–EU Security and Defence Partnership. Both sides agreed to collaborate on maritime security, counter-terrorism, cybersecurity, and co-development of defence technologies.
The summit also launched a pilot EU Legal Gateway Office in India to facilitate skilled talent mobility and business expansion.
India’s exports to the EU in 2024–25 were valued at approximately USD 75.85 billion in goods and USD 83.1 billion in services. With the FTA, both sides anticipate a significant rise in bilateral trade, along with deeper value chain integration and investment growth.
EU companies are expected to increase sourcing from India, while Indian manufacturers, particularly MSMEs, will gain more competitive access to Europe’s USD 2 trillion import market for engineering goods, chemicals, and electronics.
The agreement also addresses environmental concerns. Through cooperative provisions under the EU’s Carbon Border Adjustment Mechanism (CBAM), both parties agreed to enhanced technical collaboration, recognition of carbon pricing systems, and targeted support for emissions reduction, with safeguards for Indian exporters.
With this FTA, the EU becomes India’s 22nd free trade partner. Since 2014, India has signed deals with countries including the UAE, Australia, UK, EFTA, and Mauritius.
The India–EU agreement complements these efforts, effectively granting Indian exporters access to the entire European market. The agreement is aligned with India’s Viksit Bharat 2047 vision, reinforcing the country’s role as a reliable global partner in trade, innovation, and sustainable growth.
Officials confirmed that the FTA includes robust review mechanisms to adapt to changing global trade dynamics, emerging technologies, and regulatory challenges.
Both sides described the deal as a foundational shift in their bilateral engagement, reflecting a shared commitment to open markets, multilateralism, and democratic values.