On January 27, 2026, India and the European Union concluded a historic Free Trade Agreement (FTA). The pact links the 27 EU member states to India and encompasses an aggregate market of around two billion people, a third of world trade and a quarter of world GDP. The sentiments expressed by the leaders reveal the clarity of vision, dimension, scope and potential of this agreement, reached at the New Delhi Summit between the President of the European Commission, Ursula von der Leyen, the President of the European Council, António Costa, and Prime Minister Narendra Modi. The president of the European Commission called it the “mother of all agreements”, while the president of the European Council described India and the EU as “strategic and reliable partners taking our partnership to the next level”. Prime Minister Modi called the agreement a “model for shared prosperity”.
The India – EU FTA reduces or eliminates tariffs on a wide range of goods and services for both parties. India will gain preferential access to European markets on 97% of tariff lines, covering 99.5% of trade value, while offering 92.1% of its tariff lines, covering 97.5% of EU exports. For India, the agreement provides expanded access to products ranging from textiles and leather goods to services and technological inputs. For EU exporters, the pact reduces barriers and provides access to India’s vast and traditionally protected sectors.
Negotiations on the India – EU trade agreement date back to 2007. They were suspended in 2013 due to disagreements over market access and regulatory standards. The talks were resumed with determination in 2022, in a context of growing tensions in global trade, concerns about protectionism and considering the strategic imperative of diversifying economic partnerships. The agreement took almost 18 years to come to fruition, showing that, when there is shared understanding and mutual desire to achieve a goal, debate and discussion are part of a democratic process.
The agreement that has emerged is not merely a trade instrument, but a building block in a rules-based international economic order. It fully fits into the EU’s broader objective of forging resilient partnerships that extend to security, climate policy and defense cooperation.
The agreement comes at a time when global supply chains are facing disruptions from geopolitical pressures, while the post-pandemic recovery is underway. It creates a structured trade and investment framework that can strengthen the resilience of supply chains, particularly in sectors such as pharmaceuticals, automotive components and renewable energy technologies.
The agreement could also serve as a model for future trade agreements that reconcile market access with strategic cooperation on climate policy, digital trade, regulatory alignment and labor mobility, bringing different economies together. More developments may emerge as implementation progresses.
The agreement has yet to be ratified by the EU and Indian institutions, but both parties have signaled their willingness to move forward with these procedures.
Portugal played a very important role in achieving this milestone. The first India – EU Summit took place on 28 June 2000, in Lisbon, under the Portuguese Presidency of the Council of the EU, at which the idea of an FTA was discussed for the first time. Subsequently, Portugal organized the India – EU Leaders’ Meeting in May 2021, also under the Portuguese Presidency, which helped reposition India as a strategic partner and gave a serious and decisive boost to trade negotiations. The roadmap that led to the resumption of negotiations in 2022 was established.
Portugal contributed to relaunching and sustaining negotiations, acted as a bridge builder within the EU and provided political momentum, especially at critical moments. The fact that the agreement was finalized by the hands of António Costa, president of the European Council, perhaps represents the end of this cycle.
Ambassador of India to Portugal
Leave a Reply