NEW DELHI: India and the European Union are on the brink of finalising what officials are calling the “mother of all deals”, a landmark trade and strategic partnership aimed at strengthening economic and geopolitical ties. The announcement is expected during the EU-India summit next week in New Delhi, where European Commission President Ursula von der Leyen and European Council President Antonio Costa will meet Prime Minister Narendra Modi.
Negotiations for the free trade pact, ongoing for nearly two decades, have gained momentum amid global pressures from China and the United States, as both powers face tariffs, export controls, and geopolitical tensions. The deal aims to expand trade in goods and services, streamline mobility for seasonal workers, students, and researchers, and lay the groundwork for security and defence cooperation, including maritime security, cybersecurity, counter-terrorism, and possibly joint military equipment production.
We are on the cusp of a historic India-EU trade agreement — the ‘mother of all deals’ — creating a 2-billion-people market, nearly a quarter of global GDP. Europe wants to do business with the world’s fastest-growing and most dynamic economies. India is central to that future.” —… pic.twitter.com/fCN7KwL5Sb
— Himanshu Jain (@HemanNamo) January 20, 2026
Currently, bilateral trade in goods stands at €120 billion ($139bn), with an additional €60 billion in services. While India accounts for just 2.5% of EU goods trade compared to China’s 15%, officials say the deal could unlock vast untapped potential. European industries seek lower Indian tariffs on cars, machinery, and chemicals, while India hopes for improved market access for textiles and pharmaceuticals. Sensitive sectors such as agriculture will see limited concessions, as New Delhi protects dairy and grain production.
Analysts note that the EU-India partnership is also strategically motivated. Europe aims to diversify relations away from the US, while India is reducing dependence on Russia for defence equipment and cultivating a multi-alignment foreign policy. The summit coincides with Republic Day celebrations in India, underscoring the symbolic and strategic importance of the agreement.
Read More: Future of Pakistan-Afghanistan Ties
If concluded successfully, the pact would mark a historic milestone, combining trade liberalisation with security collaboration, and could reshape global economic and strategic alignments in the coming decades.