In a groundbreaking development for global trade, India and the European Union have concluded negotiations on a comprehensive trade agreement that represents approximately 25% of the world’s economy. Prime Minister Narendra Modi announced the completion of this landmark pact on Tuesday, marking the culmination of nearly twenty years of intermittent negotiations between the parties.
The agreement establishes a framework for India to gradually open its massive, previously protected market of 1.4 billion people to free trade with the 27-nation European bloc, which currently stands as India’s largest trading partner. Bilateral trade between India and the EU reached $136.5 billion during the fiscal year ending March 2025.
This strategic partnership emerges against a backdrop of shifting global alliances and economic uncertainties. The deal follows the recent collapse of India-US trade negotiations after the Trump administration imposed substantial tariffs, including a 50% levy on Indian goods. The agreement also comes shortly after the EU finalized similar pacts with Mercosur, Indonesia, Mexico, and Switzerland.
According to Indian government officials familiar with the matter, the formal signing ceremony will occur following a five-to-six month legal review process, with full implementation expected within twelve months. This agreement represents part of a broader pattern of nations seeking alternative trade partnerships amid increasing volatility in traditional Western alliances.