‘Mother of All Deals’: EU Commission Moves India-EU FTA Closer to Signing

The European Commission on Friday forwarded its proposals for the signing and conclusion of the India-European Union (EU) free trade agreement (FTA) to the European Council, marking a key step towards formally concluding the landmark trade pact by the end of the year.

India and the EU concluded negotiations for the agreement in January 2026, describing the pact as the “mother of all deals”. The negotiations had resumed in 2021 after a nearly decade-long hiatus. Prime Minister Narendra Modi is expected to travel to Brussels later this year for the formal signing of the agreement.

“If authorised by the Council, this will be the largest trade agreement ever concluded by both the EU and India,” the European Commission said in a statement.

After signing, the FTA will require approval from the European Parliament before it can enter into force. India is also undertaking its own internal ratification process.

The agreement is expected to come into force in early 2027. Once implemented, it will improve market access, reduce tariffs, remove unnecessary trade barriers and establish more predictable rules for trade and investment between India and the EU.

Why India-EU FTA Matters

The European Commission said Friday’s proposal is a crucial step towards ensuring that businesses and consumers can benefit from the agreement as quickly as possible.

The move also follows the fast-track approach outlined by EU Commissioner for Trade and Economic Security Maroš Šefčovič, aimed at accelerating the implementation of trade agreements amid geopolitical uncertainty and increasing pressure on the global trading system.

The Commission said the agreement reflects the EU’s broader effort to strengthen economic relations with key partners in the Indo-Pacific.

“Timing matters, which is why we are now following through by submitting our proposals to the Council for signature and conclusion in record time,” Šefčovič said.

He added that the agreement brings together two of the world’s largest economies, representing a market of around 2 billion people and roughly a quarter of global GDP.

India-EU Trade: Key Numbers

Trade in goods and services between India and the EU is currently worth more than €180 billion annually.

Under the FTA, tariffs on 96% of EU goods exports to India will be eliminated or reduced. The tariff cuts are expected to save European exporters around €4 billion a year in duties.

India is the EU’s ninth-largest trading partner for goods globally and its sixth-largest partner for services.

Bilateral trade in goods stood at €118 billion in 2025. India’s major exports to the EU include machinery, appliances, chemicals, textiles, metals and petroleum products. EU exports to India are led by industrial goods, transport equipment and chemical products.

Two-way services trade reached €67 billion in 2025, comprising €29.2 billion in EU exports to India and €37.8 billion in imports from India.

India-EU Investment

EU foreign direct investment stock in India stood at €132.8 billion in 2024, while India’s FDI stock in the EU was estimated at €13.7 billion.

Most trade will be liberalised when the FTA enters into force. However, certain goods will be subject to transition periods of three, five or seven years. Some partially liberalised tariff lines will be governed by specific arrangements.

Beyond tariff reductions, the agreement seeks to strengthen cooperation and remove technical barriers to trade in goods. It is also expected to create a more transparent, predictable and cost-effective trading environment, while improving market access and reducing costs for businesses.