new delhi
Reuters
—
India and the European Union have struck a long-overdue landmark trade deal, Indian Prime Minister Narendra Modi said on Tuesday, as the two countries seek to avoid a volatile relationship with the United States.
After nearly two decades of on-and-off negotiations, the deal paves the way for India to open its vast, guarded market to free trade with the 27-nation European Union, its largest trading partner.
“Yesterday, a major agreement was signed between the European Union and India,” PM Modi said.
“People around the world call this the mother of all agreements. This agreement will create huge opportunities for 1.4 billion people in India and millions of people in Europe,” he said.
Prime Minister Modi and European Commission President Ursula von der Leyen are expected to make a joint announcement with details of the deal at the India-EU summit in New Delhi later on Tuesday.
Trade between India and the EU amounted to $136.5 billion in the financial year ending March 2025.
An Indian government official familiar with the matter said formal signing of the India-EU deal would take place after a legal review expected to take five to six months.
“We expect the agreement to be implemented within a year,” the official added.
The agreement comes just days after the EU signed a pivotal agreement with the South American region Mercosur, following deals with Indonesia, Mexico and Switzerland last year.
During the same period, New Delhi signed agreements with the United Kingdom, New Zealand, and Oman.
The flurry of deals underscores global efforts to avoid trade with the United States, as President Donald Trump’s plans to take over Greenland and tariff threats against European countries test long-standing alliances between Western nations.
A trade deal between India and the US collapsed last year due to a breakdown in communication between the two governments.
Negotiations between India and the EU will resume in 2022 after nine years of stagnation, gaining momentum after President Trump imposed tariffs on several trading partners, including a 50% tariff on goods from India.
Ajay Srivastava, a former Indian trade official, said that for India, lower tariffs with the EU would lead to increased exports in labor-intensive sectors and help partially offset the impact of US tariffs.
He also said the deal would provide an immediate price advantage for EU products in India as it would provide some relief from high customs duties, such as up to 110%, on cars.
