India and EU Set to Sign Historic Trade Deal as Two-Decade Negotiations Conclude

Chief Guest President of the European Commission Ursula von der Leyen is being received by Prime Minister Narendra Modi during the national flag hoisting at Kartavya Path on the occasion of the 77th Republic Day celebrations, in New Delhi on Monday.(@narendramodiXvia ANI) | Photo Credit: ANI

New Delhi — India and the European Union are poised to formalize a landmark Free Trade Agreement (FTA) on Tuesday, marking the culmination of negotiations that began nearly two decades ago.

The agreement will be announced at the 16th India-EU Summit in New Delhi, where Prime Minister Narendra Modi will hold delegation-level discussions with European Commission President Ursula von der Leyen and European Council President Antonio Costa.

Commerce Secretary Rajesh Agrawal confirmed on Monday that "official-level negotiations are being concluded, and both sides are all set to announce the successful conclusion of FTA talks on January 27."

The summit will also see the signing of a Security and Defence Partnership (SDP), elevating the strategic engagement between India and the 27-member bloc.

End of a Long Journey

The EU-India FTA marks the end of a complex negotiation process first launched in 2007. Talks had stalled multiple times over "sensitivities" around agriculture, carbon border taxes, service delivery, and non-tariff barriers before being revived in recent years.

With bilateral trade already exceeding $136 billion, sources indicate this will be "one of the biggest" bilateral trade deals in the world. As part of the agreement, India is expected to slash tariffs on automobiles to 40%, according to sources familiar with the negotiations.

Strategic Timing

The announcement comes just one day after von der Leyen served as chief guest at India's 77th Republic Day celebrations on Monday, where she was received by Prime Minister Modi at the national flag hoisting ceremony at Kartavya Path.

Visiting EU leaders emphasized that a "successful India" is in the world's interest, signaling the bloc's commitment to deepening ties with one of the world's fastest-growing economies.

The trade agreement is expected to boost economic cooperation across sectors and provide both sides with greater market access, coming at a time when global trade patterns are being reshaped by geopolitical tensions and supply chain realignments.