‘Mother of All Deals’: India and EU Seal Sweeping Free Trade Pact
India and the European Union have concluded a landmark free trade agreement after nearly 20 years of on-and-off talks. It is the largest such deal signed by either side, slashing tariffs and opening up services amid rising geopolitical tensions and global trade policy uncertainty.
Announced Jan. 27, the deal links two of the world’s largest markets, covering approximately 2 billion people and nearly a quarter of global GDP. Indian Prime Minister Narendra Modi, European Commission President Ursula von der Leyen, and European Council President Antonio Costa met in New Delhi to formally unveil the agreement as India celebrated Republic Day.
Leaders on both sides hailed the pact as historic. Modi said it would unlock new opportunities for workers, manufacturers, and service providers, while von der Leyen said it creates a vast free-trade zone that would deepen strategic ties. “We did it, we delivered the mother of all deals,” von der Leyen told reporters in New Delhi. The agreement is India’s most ambitious trade pact to date, spanning goods, services, and investment across the 27-country bloc. It sharply lowers tariffs, opens dozens of service sectors, and simplifies customs and regulatory rules.
For India, the agreement offers near-total tariff-free access to the EU over the coming years, covering almost all bilateral trade and boosting competitiveness for exporters in sectors such as textiles, pharmaceuticals, machinery, and gems and jewelry. Europe will also benefit, with tariffs reduced or eliminated on 96.6% of EU exports to India. It is expected to save European exporters approximately 4 billion euros ($4.75 billion) annually in import duties.
The agreement still requires legal approval in New Delhi and Brussels and is expected to take effect next year. Experts say India and the EU are seeking to diversify trade ties and grow beyond their dependence on the American market as United States President Donald Trump’s tariff pressure shakes the global economy.
Yesel Kang Copy Editor teen/1772193972/1613367750
1. Who met in New Delhi to formally unveil the landmark trade agreement?
2. What percentage of EU exports to India will benefit from reduced tariffs?
3. When is the sweeping deal between India and Europe expected to start?
4. How much money is expected to be saved annually in import duties?
1. Why should countries trade freely without paying extra taxes to others?
2. How can a free trade pact unlock new opportunities for manufacturers?
3. Should nations focus on their local markets or the global economy?
4. What is the best way to resolve a trade fight between nations?
India and the European Union have concluded a landmark free trade agreement after nearly 20 years of on-and-off talks. It is the largest such deal signed by either side, slashing tariffs and opening up services amid rising geopolitical tensions and global trade policy uncertainty.
