India-EU Ink Landmark FTA: 'Mother of All Deals' to Reshape Global Trade

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AuthorRiya Kapoor|Published at:
India-EU Ink Landmark FTA: 'Mother of All Deals' to Reshape Global Trade
Overview

India and the European Union have finalized a landmark free trade agreement, a deal Prime Minister Narendra Modi hailed as the 'mother of all deals.' This pact encompasses 25% of global GDP and one-third of global trade. Discussions also explored integrating defence supply chains, signalling deepening strategic ties.

Landmark India-EU Free Trade Agreement Finalized

India and the European Union have concluded a comprehensive free trade agreement (FTA), a development Prime Minister Narendra Modi characterized as the "mother of all deals." The pact is poised to reshape global commerce, directly influencing 25 percent of the world's Gross Domestic Product and one-third of international trade. This agreement represents a significant step in bolstering bilateral economic ties and creating opportunities for millions across both regions.

Economic Scale and Opportunity

Modi announced the "very big agreement" during an address at the Indian Energy Week, emphasizing its significance as an "excellent example of coordination between two economies." The FTA is expected to complement existing agreements with Britain and the European Free Trade Association (EFTA), thereby strengthening global trade dynamics and supply chain resilience. The Prime Minister extended congratulations to those in sectors like textiles, gems and jewellery, leather, and footwear, projecting that the agreement will stimulate manufacturing and expand the services sector in India. It is anticipated to bolster international confidence in India as a business and investment destination.

Bilateral Trade Surge

Bilateral trade between India and the EU demonstrated robust growth, surpassing US$190 billion in 2024-25. Indian exports of goods and services to the EU reached $75.9 billion and $30 billion, respectively. Conversely, the EU exported $60.7 billion in goods and $23 billion in services to India during the same period. These figures highlight the substantial existing economic relationship that the new FTA aims to further enhance.

Deepening Defence Cooperation

Beyond trade, strategic ties are being fortified. Defence Minister Rajnath Singh met with EU's chief of foreign and security affairs, Kaja Kallas, to discuss opportunities for integrating defence supply chains. The aim is to build trusted defence ecosystems and future-ready capabilities, signalling a move towards greater cooperation in security and defence, especially against a backdrop of evolving global geopolitical landscapes. Singh expressed anticipation for increased collaboration between India and EU nations.

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