New Delhi — India and the European Union have reached a landmark free trade agreement, closing one of the longest and most complex negotiation processes in modern trade diplomacy. After 18 years of intermittent talks, the deal brings together the world’s fifth- and third-largest economies into a vast free trade area covering nearly two billion consumers, in what both sides describe as a defining moment amid global economic uncertainty.

European Commission President Ursula von der Leyen, speaking in New Delhi alongside Indian Prime Minister Narendra Modi and European Council President António Costa, hailed the pact as the “most important trade agreement of all” and famously dubbed it the “mother of all deals.” She framed the accord as a clear political choice by “two giants that opted for a win-win partnership” at a time when protectionism and trade fragmentation are on the rise worldwide.

A major boost for India’s global economic role

From New Delhi’s perspective, the agreement consolidates India’s position as a central pillar of global trade and supply chains. Prime Minister Modi described it as the largest free trade agreement in India’s history, emphasizing that it goes far beyond tariff cuts.

“This is not just a trade deal,” Modi said. “It is a blueprint for shared prosperity.” According to the Indian government, the pact will boost investment, foster innovation partnerships and strengthen resilient supply chains at a global level.

The agreement covers roughly 25% of global GDP and nearly one-third of world trade, reinforcing India’s growing influence as a trusted economic partner for democracies seeking diversified and stable markets.

Tariff cuts and sectoral opportunities

Under the terms announced, the European Union will reduce import tariffs on 99.5% of traded goods over a seven-year period. Many Indian exports will benefit from zero tariffs, including textiles, leather goods, marine products, chemicals, rubber, base metals, gems and jewellery—sectors that are both labor-intensive and strategically important for India’s growth and employment.

On the European side, the deal is expected to save companies around €4 billion annually in tariffs, while opening the door to a significant expansion of exports to the Indian market, potentially doubling by 2032.

Von der Leyen highlighted the complementary nature of the partnership: India brings scale, skills and services, while Europe contributes technology, capital and innovation. “Together,” she said, “we can generate levels of growth that neither side could achieve alone.”

Strengthening supply chains in a volatile world

Beyond economics, both leaders underscored the strategic dimension of the agreement. By deepening trade ties, India and the EU aim to reduce strategic dependencies at a time when trade is increasingly used as a geopolitical tool.

“In a world of disruptions, India’s rise is good news,” von der Leyen noted. “When India succeeds, the world becomes more stable, more prosperous and more secure.”

The deal also reinforces shared values, including commitments to democracy, the rule of law and rules-based international trade—an aspect Modi highlighted as central to the long-term partnership.

What comes next

While negotiations are now concluded, the agreement will undergo legal review and formal ratification on both sides, a process expected to take at least six months. Talks originally began in 2007, were suspended in 2013 and resumed in 2022, making the final breakthrough particularly symbolic.

European officials, including Trade Commissioner Maroš Šefčovič, have already described the pact as the largest free trade agreement ever concluded by the EU. Spain and other EU member states have welcomed the deal, pointing to India as a market of “enormous potential” for European—and especially Spanish—companies.

For India, the agreement marks not only a trade milestone but also a diplomatic and economic statement: the country is ready to play a leading role in shaping a more open, balanced and resilient global trading system.