NEW DELHI – India and the European Union finalized negotiations on a landmark free trade agreement Monday, set for official announcement January 27, as both sides celebrate a “balanced, forward-looking” pact boosting economic ties between a market of 2 billion consumers and a quarter of global GDP.
Trade Secretary Rajesh Agrawal hailed the deal as propelling trade and investment, with bilateral commerce already at $136.5 billion in the fiscal year through March 2025. Formal signing follows legal reviews over five to six months, with implementation eyed within a year, an Indian official said.
The accord opens India’s vast, protected market, the world’s largest, to tariff-free EU goods after nearly two decades of fits-and-starts talks relaunched in 2022. Momentum surged last year when Prime Minister Narendra Modi and European Commission President Ursula von der Leyen fast-tracked negotiations amid US President Donald Trump’s tariff threats, including 50% duties on Indian imports that derailed a prior India-US deal.
This fits a global flurry: the EU inked pacts with Mercosur, Indonesia, Mexico, and Switzerland recently, while India sealed deals with Britain, New Zealand, and Oman. All hedge against strained US relations, including Trump’s Greenland ambitions and European tariff warnings testing Western alliances.
Key compromises addressed cars and steel, flashpoints in final haggling. India plans to slash EU car import duties from up to 110% to 40%, per Reuters, while pressing the EU to ease steel export curbs for its producers. Sensitive farm and dairy sectors remain excluded to shield India’s millions of subsistence farmers.
The EU, India’s top trading partner, gains deeper access to South Asia’s powerhouse, signaling a strategic pivot as traditional alliances waver.