After 20 years of talks, the deal opens India’s vast market to the EU, its largest trading partner, amid shifting global alliances.
India and the European Union have finalised a landmark trade agreement, announced by Prime Minister Narendra Modi on Tuesday, marking the culmination of nearly two decades of negotiations. The deal integrates two of the world’s largest economies, representing about a quarter of global GDP.
The agreement will significantly open India’s vast and protected market to the EU’s 27 member states, its biggest trading partner, with bilateral trade valued at $136.5 billion in the 2024-25 fiscal year. The deal underscores both sides’ strategic pivot toward diversifying economic partnerships in a climate of global uncertainty.
This milestone follows a recent EU pact with Mercosur and comes days after India finalised trade agreements with Britain, New Zealand, and Oman. The flurry of deals highlights a broader realignment as nations seek to hedge against volatile relations with the United States.
Under the administration of President Donald Trump, U.S. ties with traditional allies have been tested, including the imposition of a 50% tariff on Indian goods and the collapse of an India-U.S. trade deal last year.
A senior Indian official stated that the formal signing of the India-EU agreement will take place after a legal review expected to last five to six months, with implementation targeted within a year.
The pact is anticipated to enhance market access, streamline regulations, and foster investment across key sectors including technology, pharmaceuticals, and manufacturing, while reinforcing supply chain resilience between Europe and South Asia.
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