EU-India FTA: 'Mother of all deals' represents one-third of global trade

[India and European Union - Flag handshake symbolizing partnership and cooperation]
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The European Union and India have reached a landmark free trade agreement after nearly two decades of negotiations, the largest such deal concluded by either side, representing about one-third of global trade.

"We have concluded the mother of all deals," declared European Commission President Ursula von der Leyen, who is on a three-day visit to India. "We have created a free trade zone of 2B people, with both sides set to benefit."

"This agreement represents approximately 25% of global GDP and about one-third of global trade," India's Prime Minister Narendra Modi announced.

The EU and India already trade over €180B ($213.36B) worth of goods and services per year. The FTA is expected to double EU exports to India by 2032 by eliminating or reducing tariffs, saving around €4B ($4.74B) per year in duties on European products.

Under the deal, India will slash tariffs on EU cars from 110% to as low as 10%, and duties on car parts will be eliminated after 5-10 years.

India will mostly eliminate tariffs ranging up to 44% on machinery, 22% on chemicals and 11% on pharmaceuticals that it imports from the EU.

The FTA also removes or reduces India's tariffs on EU exports of agri-food products—tariffs on wines will be cut from 150% to 75% and eventually to levels as low as 20%; tariffs on olive oil will go down from 45% to 0% over five years; processed agricultural products like bread and confectionary will see tariffs of up to 50% eliminated.

The deal will grant EU companies privileged access to the Indian services market, including sectors such as financial services and maritime transport.

The EU and India intend to launch a joint platform on climate action in the first half of 2026. The EU plans to provide €500M in support over the next two years to help India's efforts to reduce greenhouse gas emissions and accelerate its long-term sustainable industrial transformation.

The FTA [https://ec.europa.eu/commission/presscorner/detail/en/ip_26_184] must be approved by the European Parliament and ratified by India before it becomes effective.

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