New Delhi: India and the European Union have reached a landmark trade agreement that is expected to boost bilateral commerce and deepen economic ties between the two partners after nearly two decades of negotiations. Prime Minister Narendra Modi and European leaders have confirmed that the long-pending pact will include significant tariff concessions, making European products cheaper in the Indian market while also opening new opportunities for Indian exporters.
Under the deal, more than 90 percent of European goods imported into India will benefit from tariff cuts, a move estimated to save EU exporters up to euro 4 billion in duties. Key consumer items such as wine and chocolate are expected to attract zero duties, making them more affordable for Indian buyers and enhancing the competitiveness of European brands in one of the world’s fastest-growing markets.
The agreement, often dubbed the “Mother of All Deals” by EU officials, marks a major milestone in India’s trade strategy. It comes amid a global realignment of trade partnerships, with both India and the EU seeking diversified supply chains and markets in the wake of shifting geopolitical dynamics. India’s trade with the EU hit approximately USD 136.5 billion in the fiscal year ending March 2025, underscoring the significance of the bloc as one of its largest trading partners.
Tariff concessions under the pact are expected to extend beyond consumer goods. Negotiations have reportedly covered reductions in duties on European automobiles, with India offering significant cuts over time, although sensitive sectors such as agriculture and dairy remain largely protected to shield domestic interests. Services and regulatory cooperation are also important elements under discussion to ensure that Indian IT, professional services, and skilled personnel gain better access to European markets.
For Indian businesses, duty cuts on European machinery, high-end components, and chemical imports could reduce production costs and enhance competitiveness. At the same time, European access to India’s expanding market—particularly for premium goods—offers a substantial growth opportunity. While the pact has cleared major hurdles, some issues around regulatory norms and non-tariff barriers are still being fine-tuned ahead of full implementation.
The formal announcement of the agreement was expected during an India-EU summit in New Delhi, with details to be ratified and legally finalized in the coming months. Once fully in force, the deal could reshape trade flows between India and the EU, benefiting industries and consumers on both sides.
