India and the European Union have concluded a long-pending Free Trade Agreement after an 18-year hiatus, agreeing to sweeping tariff cuts to deepen economic ties amid global trade uncertainty.
The pact has been described as the “mother” of all its recent trade deals, underscoring its scale and strategic importance as both sides seek to reduce reliance on the US and China.
The agreement will remove or reduce duties on more than 90% of EU goods exports to India, with exports projected to potentially double by 2032. EU exports to India already support around 800,000 jobs, with more expected as trade expands.
The deal also includes €500 million in EU support over the next two years to help India cut emissions and accelerate its green transition, covering sectors such as alcohol, food products, chemicals, machinery, pharmaceuticals and aerospace. The EU remains India’s largest goods trading partner, with bilateral trade worth about $136 billion in 2024-25, while Indian services exports to the EU reached €37 billion in 2024.
The agreement marks the most ambitious trade opening India has ever offered a partner, delivering major gains for the European Union. EU exporters are expected to save up to €4 billion a year in duties, supported by simpler customs procedures that will make trade faster and cheaper. India will sharply cut tariffs across a wide range of goods, reducing duties on beer to 50%, spirits to 40% and wine to 20-30%, while slashing motor vehicle tariffs from 110% to 10% under a quota of 250,000 vehicles annually. Tariffs on olive oil, vegetable oils, fruit juices, processed foods, aircraft, spacecraft and most chemical products will be eliminated, alongside steep reductions on machinery, pharmaceuticals and chemicals. More than 90% of EU goods exports to India will face lower or zero tariffs. The deal also strengthens protection for EU intellectual property, includes a digital trade chapter to ensure secure and predictable online commerce, and grants improved access for EU firms in financial and maritime services. A dedicated SME chapter, contact points and greater regulatory transparency aim to ease trade and investment, while €500 million in EU support over the next two years is envisaged to help India cut greenhouse-gas emissions. Negotiations on a separate agreement covering Geographical Indications are continuing.
Prime Minister Narendra Modi welcomed the India–EU Free Trade Agreement, calling it the “mother of all deals” and a reflection of the deepening partnership between two major global economies that together account for nearly a quarter of the world’s GDP. He said the pact would strengthen global confidence in India among businesses and investors, underscoring the country’s push for international partnerships across sectors.
With the pact, India becomes the third Asian country after Japan and South Korea to secure a free trade agreement with the European Union. Prime Minister Narendra Modi’s government has recently signed trade deals with Australia, the UK, New Zealand and the European Free Trade Association, even as negotiations with the US remain unresolved.
Trade minister Piyush Goyal said he has concluded seven trade agreements with developed nations, calling this one “the mother of all.” While the EU has moderated its expectations on market access and the deal includes limited environmental and labour provisions, areas where talks will continue, dairy has been excluded, though wine, spirits and oils are covered. The two sides are also set to unveil a defence pact aimed at strengthening strategic ties.
Antonio Costa brings Goa roots into India–EU trade milestone
The announcement of the long-awaited India–EU trade deal featured a light moment when European Council President Antonio Costa revealed his personal link to India by holding up his OCI card. Speaking alongside Prime Minister Narendra Modi and EU President Ursula von der Leyen, Costa spoke warmly of his Goa roots, drawing smiles from the audience.
Calling the moment deeply meaningful, Costa said he was proud of his family’s origins in Goa, noting that the India–Europe partnership was personal for him. His remarks highlighted a unique cultural connection as the two sides marked a major step in their growing relationship.
Antonio Costa’s visit to India likely stirred fond childhood memories. His previous visit dates back to 2017, when, as Portugal’s Prime Minister, he came to release the English translation of a play by his father, poet and novelist Orlando Costa.
Born in Lisbon in 1961, Costa first travelled to Goa as a teenager with his parents. His grandfather spent much of his life in Margao, where the family’s over 200-year-old ancestral home on Abade Faria Road still stands and is home to extended family members. During his 2017 visit, Costa visited the house and met relatives.
Orlando Costa, a noted writer influenced deeply by Goa, also wrote on Rabindranath Tagore. “My father went to Lisbon but never left Goa. Goa was always present in his works,” Costa had said then. Known for his calm style and Goan roots, the 64-year-old leader is often dubbed the “Gandhi of Lisbon.”
