NEW DELHI, Jan 27 — India and the European Union (EU) have finalised a long-pending landmark trade deal, Indian Prime Minister Narendra Modi said today, as the two sides seek to hedge against fickle ties with the United States (US).
After nearly two decades of on-and-off negotiations, the deal will pave the way for India to open its vast, guarded market to free trade with the 27-nation EU, its biggest trading partner.
"Yesterday, a big agreement was signed between the European Union and India. 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," he said.
Modi and European Commission President Ursula von der Leyen are expected to make a joint announcement at an India-EU summit in New Delhi later today, along with details of the deal.
Trade between India and the EU stood at US$136.5 billion (RM539.72 billion) in the fiscal year through March 2025.
An Indian government official aware of the matter said that the formal signing of the India-EU deal would take place after legal vetting, expected to last five to six months.
"We expect the deal to be implemented within a year," the official added.
Flurry of trade deals
The agreement comes days after the EU signed a pivotal pact with the South American bloc Mercosur, following deals last year with Indonesia, Mexico, and Switzerland.
During the same period, New Delhi finalised pacts with the United Kingdom, New Zealand, and Oman.
The spate of deals underscores global efforts to hedge against trade with the US as President Donald Trump's bid to take over Greenland and tariff threats on European nations test longstanding alliances among Western nations.
An India-US trade deal collapsed last year after a breakdown in communications between the two governments.
Talks between India and the EU were relaunched in 2022 after a nine-year lull, and gathered momentum after Trump put tariffs on several trading partners, including a 50 per cent tariff on goods from India.
Former Indian trade official Ajay Srivastava said that for India, the tariff cuts with the EU will lead to more exports in labour-intensive sectors, helping to partly offset the impact of US tariffs.
The deal will also give EU products an immediate price advantage in India, thanks to some relief from high tariffs, for instance, up to 110 per cent on cars.
