India and EU agree to the “Mother of all Deals”

India and the European Union (EU) have finalised a historic Free Trade Agreement (FTA) after nearly two decades of negotiations – a pact widely described as the “mother of all trade deals.” The agreement was announced at the India-EU Summit in New Delhi by Indian Prime Minister Narendra Modi and senior EU leaders, with the aim of creating a free-trade zone covering around 2 billion people and nearly 25% of global GDP.

Under the deal, tariffs on a broad range of goods will be cut or eliminated – around 96-97% of EU exports to India will see reduced duties, potentially saving up to €4 billion annually. This includes significant reductions in duties on cars, machinery, chemicals, processed foods, wine, and spirits; phased reductions are planned over time. In return, the EU will ease market access for Indian exports including textiles, gems and jewellery, leather goods, pharmaceuticals, and more.

Tariffs on cars will be reduced to nearly 10% and EU aircraft and spacecraft will be eliminated facilitating the exports of the EU. Tariffs on wine will be reduced to 20-30%, 40% on spirits and 50% on beer and the tariffs on fruit juices and processed food will be eliminated.

The agreement is expected to deepen economic ties, boost trade and investment, and potentially double EU exports to India by 2032. It also includes provisions to strengthen cooperation in services, customs procedures, and market regulations — marking one of India’s most ambitious trade commitments to date.

Certain sensitive sectors such as some agricultural products, steel, and automobiles were negotiated separately or phased in cautiously. The pact still needs to undergo legal vetting and ratification by the European Parliament, EU member states, and India’s cabinet before coming into effect.

Overall, the deal is seen as a major milestone in India’s trade strategy and a significant strengthening of strategic economic relations between India and the EU.