India and EU Finalise Historic Free Trade Agreement
The Free Trade Agreement comes after nearly two decades; deal covers 25% of global GDP and is expected to take effect by 2027.
Jan 27, 2026 – India and the European Union (EU) finalised negotiations on Tuesday (January 27) on a long-awaited Free Trade Agreement (FTA), after nearly two decades. Seen as a major milestone for both economies, this agreement is being hailed as the “mother of all deals” by leaders from both sides and perhaps “one of the biggest” bilateral deals in the world.
The FTA covers a huge share of the global economy: about 25% of global GDP and roughly one-third of world trade once fully in force. It is expected to create a market of two billion people, open markets for goods, services, and investment between India and the 27 EU member States.
The formal legal review (“scrubbing”) is underway and the actual signing and implementation (after ratification by the European Parliament and India’s cabinet) could happen across 2026-27. The deal is expected to come into effect sometime in 2027.
On Monday (January 26), Commerce Secretary Rajesh Agrawal had confirmed that the negotiators of India and the EU have successfully concluded an “ambitious, balanced, forward-looking and mutually beneficial India-EU free trade agreement (FTA)”. On Tuesday (January 27), India’s Prime Minister Narendra Modi announced the FTA saying it “represents 25% of global GDP and one-third of global trade”.
"This Free Trade Agreement with the European Union will also complement Britain and EFTA's agreements...I congratulate the people of the nation for this," he said.
Speaking at the India Energy Week, he hailed the move adding that it will boost the manufacturing sector and support services.
The deal was signed at the 16th European Union-India Summit in New Delhi with President of the European Commission Ursula von der Leyen and visiting President of the European Council, Antonio Costatwo-day India visit. They were also the chief guests at the Republic Day celebrations.
India and the EU had first started talks for the free trade agreement in 2007. The talks were suspended in 2013 and restarted in June 2022.
With Media Inputs
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