India and the European Union have finalised a long-awaited trade agreement, Indian Prime Minister Narendra Modi announced on Tuesday, calling it the “mother of all deals.” The pact aims to strengthen economic ties and hedge against volatile trade relations with the United States.
Read More: Europe and India push for historic ‘mother of all deals‘
After nearly two decades of intermittent negotiations, the agreement will open India’s large and tightly regulated market to free trade with the 27-nation EU, which is India’s biggest trading partner. Trade between the two sides reached $136.5 billion in the fiscal year through March 2025.
“MOTHER OF ALL DEALS”
This Historic deal after 18 years came to reality. The pact between the European Union and India will shape the neo trade reforms and better connectivity. Trump tariffs actually became a blessing for India and PM Modi is such a classy diplomatic player… pic.twitter.com/Qasl6LNJDu
— Tanmay Sutradhar 🇮🇳 (@thetanmay_) January 27, 2026
Europe and India are making history today.
We have concluded the mother of all deals.
We have created a free trade zone of two billion people, with both sides set to benefit.
This is only the beginning.
We will grow our strategic relationship to be even stronger. pic.twitter.com/C7L1kQQEtr
— Ursula von der Leyen (@vonderleyen) January 27, 2026
“People around the world are calling this the mother of all deals. This agreement will bring major opportunities for the 1.4 billion people of India and the millions of people in Europe,” Modi said. He is expected to join European Commission President Ursula von der Leyen for a formal announcement at an India-EU summit in New Delhi later on Tuesday.
The formal signing of the agreement will follow a legal vetting process expected to last five to six months, with full implementation anticipated within a year, according to an Indian government official.
The pact comes amid a flurry of global trade agreements, including the EU’s recent deals with Mercosur, Indonesia, Mexico, and Switzerland, and India’s agreements with Britain, New Zealand, and Oman. Analysts say the surge in deals reflects efforts by countries to reduce dependence on trade with the US, especially after failed negotiations and US-imposed tariffs on key Indian exports.
Read More: Historic EU-India trade pact nearly finalized
For India, the deal is expected to boost exports in labour-intensive sectors, helping to offset the impact of previous US tariffs. EU exporters will also benefit from reduced Indian tariffs, which have historically reached as high as 110 percent on items such as automobiles.
The India-EU trade agreement is being hailed as a landmark step in strengthening economic and diplomatic ties between the two regions.