We Delivered The Month Of All Trade Agreements : PM Modi
New Delhi: India and the European union (EU) on Tuesday signed the crucial Free Trade Agreement (FTA) after two decades of deliberations, covering a market of approximately 2 billion people and roughly 25 per cent of the global GDP.
Prime Minister Narendra Modi described as a coincidence the historic Agreement ‘with 27 countries of the EU on 27th January,’ European Commission President Ursula von der Leyen said, “We did it, we delivered the mother of all trade agreements.” Antonio Costa, President, European Council, said India and the EU must work together toward shared prosperity and security.
The formal ratification of the FTA will take another six months. Prime Minister Modi and EC President Ursula von der Leyen announced the successful conclusion of the “mother of all deals.” The negotiated text is currently undergoing “legal scrubbing,” a technical review to ensure legal consistency, expected to take 5 to 6 months. The deal is projected to enter into force in early 2027.
The Agreement will ensure that India eliminates or significantly reduces tariffs on most EU goods by value. This includes slashing import duties on European cars from 110 per cent to 40 per cent and reducing high duties on wines and spirits.
The Agreement also provides duty-free or preferential access for Indian labour-intensive sectors like textiles, gems and jewellery, leather, and chemicals. Sensitive sectors, particularly agriculture and dairy, remain largely excluded from the agreement to protect local producers.
The EU has committed 500 million Euros in support over the next two years to assist India’s green transition and emissions reduction efforts.
While the FTA itself is awaiting formal ratification, other related documents—including a Security and Defence Partnership and a Green Hydrogen Task Force agreement—were formally signed and exchanged during the 16th India-EU Summit.
Highlighting the strategic importance of the pact, the Prime Minister called it “an excellent example of coordination between two economies of the world.” He said the Agreement will complement existing deals with the UK and the European Free Trade Association (EFTA), strengthening global trade and supply chains.
“This free trade agreement will strengthen confidence in India for every business and every investor in the world,” the Prime Minister said, noting that the deal will provide a significant boost to India’s manufacturing and services sectors.
He said the FTA will further strengthen global confidence in India for businesses and investors across the world. India is actively working on global partnerships across all sectors, the Prime Minister added.
A Joint Statement issued after the 16th India-EU Summit described the ‘historic deal’ as a ‘milestone in the India–EU Strategic Partnership’ that will significantly enhance bilateral trade and investment ties, drive shared prosperity, strengthen resilient and diversified supply chains, and support sustainable and inclusive growth.
The leaders of the two sides also welcomed the signing of the India–EU Security and Defence Partnership, the first such overarching defence and security framework between the two sides that will deepen ties in the domains of maritime security, defence industry and technology, cyber and hybrid threats, space, and counter terrorism, among others.
They also welcomed the launch of negotiations on a Security of Information Agreement that will facilitate the exchange of classified information and pave the way for a stronger cooperation in areas related to security and defence.
