India and the European Union have concluded negotiations on a comprehensive free trade agreement after nearly 20 years. The pact aims to boost trade, reduce tariffs, and strengthen strategic partnerships amid shifting global dynamics. European Council President Antonio Costa stated it sends a message of stability against rising protectionism.
India and the European Union (EU) concluded negotiations on a comprehensive free trade agreement (FTA) on Monday, after nearly two decades of talks. The pact is expected to be formally announced at the India-EU Summit on Tuesday. The EU is India's largest trading partner, accounting for €120 billion in goods trade in 2024, or 11.5% of India's total trade. Services trade stood at €59.7 billion in 2023, while foreign direct investment stock reached €140.1 billion in 2023.
European Council President Antonio Costa, who was the chief guest at India's 77th Republic Day celebrations alongside European Commission President Ursula von der Leyen, said, "In our multipolar world, it’s essential that the EU and India become closer and closer partners because we can together be strong providers of stability, protectability and reliability in international relations and to protect our international rules-based order."
Against the backdrop of US trade policies under President Donald Trump, Costa emphasized that the FTA serves as a "very important geopolitical stabiliser and a showcase of how it’s possible to protect international rules-based trade." He noted that the agreement sends an "important political message to the world that India and the EU believe more in trade agreements than in tariffs," especially as protectionism rises with countries increasing tariffs.
The deal will boost Indian exports like textiles and jewellery, impacted by 50% US tariffs since late August. Additionally, a Security and Defence Partnership and a mobility framework for Indian students and professionals will be finalized. Costa highlighted cooperation in cyber security, counter-terrorism, and maritime security, including Operation Aspides to ensure free trade routes. Ratification by the European Parliament could take at least a year before the agreement takes effect, strengthening India's trade diversification amid global geo-economic turbulence.
