Thanks, Trump? India – EU Seal ‘Mother of All Deals’

After nearly 20 years of negotiations, India and the European Union have finalized a historic free trade agreement (FTA), dubbed the “mother of all deals” by European Commission President Ursula von der Leyen. Prime Minister Narendra Modi called it “historic,” noting it covers nearly a third of global trade. European Council President Antonio Costa was also present during the announcement. The EU leaders were chief guests at India’s 77th Republic Day parade in New Delhi on Monday.

The deal comes amid rising tensions with the United States. India has faced higher US tariffs, including up to 50% on Russian crude, while the EU’s trade ties with the US have also been strained. Economists say the US’s aggressive trade stance may have accelerated the India-EU deal, pushing both sides to finalize it faster.

The FTA allows free trade between India, the world’s fourth-largest economy, and the 27 EU member states, the world’s second-largest economy. Together, India and the EU account for around 25% of global GDP.

The agreement is expected to double EU exports to India, giving European companies easier access to India’s 1.4 billion consumers. Steep duty cuts on over 90% of goods will make products like wine and cars cheaper, benefiting automakers such as Mercedes-Benz, BMW, and Volkswagen.

Indian exports will also gain better access to the EU, with lower or zero tariffs on handicrafts, marine products, textiles, leather, and gems and jewelry. Prime Minister Modi said the deal will boost India’s manufacturing sector and expand services-related industries.

Although the FTA has been finalized, the official signing awaits legal clearance. Implementation is expected by the end of 2026 or early 2027.

Experts suggest the deal could also prompt the US to speed up trade negotiations with India, showing how global trade tensions shaped this historic agreement.