‘Mother Of All’ India-EU Trade Deal Announced. Why Formal Signing May Take At Least 6 Months?

Last Updated:January 27, 2026, 18:17 IST

The agreement requires detailed legal scrubbing and review by both India and the EU before it can be formally ratified.

Prime Minister Narendra Modi poses for a photograph with European Commission President Ursula von der Leyen (R) and European Council President Antonio Costa. (AFP photo)

India and the European Union on Tuesday announced the conclusion of a historic “mother of all" trade deal, creating a free trade zone covering two billion people.

The announcement came during a summit in New Delhi, where Prime Minister Narendra Modi hosted European Commission President Ursula von der Leyen and European Council President Antonio Costa.

“We have concluded the mother of all deals. We have created a free trade zone of two billion people, with both sides set to benefit," von der Leyen said, adding that the partnership will continue to grow stronger in the coming years.

The long-awaited free trade agreement (FTA), first launched in 2007 and resumed in 2022, is expected to significantly boost bilateral trade, which reached about USD 136 billion in 2024-25, and open up new opportunities for cooperation in goods, services, and industrial sectors.

Why It May Take 6 Months For Formal Signing?

Under the deal, India will cut or remove tariffs on more than 90 percent of EU goods, including wines, beer, spirits, olive oil, processed food, machinery, medical equipment, chemicals, and pharmaceuticals. The EU, in return, will reduce tariffs on Indian exports such as textiles, leather, footwear, tea, coffee, spices, gems and jewellery, sports goods, toys, and marine products.

However, the deal will not be signed immediately. Following the summit, both sides are set to ink a document formally announcing the conclusion of negotiations. The final signing may take at least six months, as the agreement requires detailed legal scrubbing and review by both India and the EU before it can be formally ratified.

The summit also focused on broader strategic issues, including defence, security, climate change, and critical technologies.

India and the EU are expected to unveil a Security and Defence Partnership to deepen cooperation and facilitate participation by Indian firms in Europe’s SAFE (Security Action for Europe) programme. A Security of Information Agreement (SOIA) is also planned, along with mobility arrangements for Indian workers in Europe, covering seasonal workers, researchers, and students.

Sensitive agricultural products, government procurement, energy, and investment liberalisation were excluded from the deal. Discussions on Geographical Indications and intellectual property rights will follow separately.

(With inputs from agencies)

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