India and the European Union have finalised a long-awaited trade agreement after nearly two decades of intermittent negotiations, Indian Prime Minister Narendra Modi said on Tuesday. The deal marks a major economic and strategic milestone for both sides as they seek to reduce dependence on an increasingly unpredictable United States under President Donald Trump.
Details of the Agreement
The agreement will pave the way for India to open up its vast and traditionally protected market to freer trade with the 27-member European Union, India’s largest trading partner. Modi described the deal as transformational, saying it would create significant opportunities for India’s 1.4 billion people and millions across Europe. While full details have yet to be released, the pact is being billed by officials as one of the most comprehensive trade agreements India has ever concluded.
Official Announcement Expected
Modi and European Commission President Ursula von der Leyen are expected to formally announce the agreement later on Tuesday at an India–EU summit in New Delhi. The summit will also outline the scope, sectoral coverage, and timelines of the agreement, according to officials familiar with the matter.
Trade and Economic Context
Trade between India and the EU reached $136.5 billion in the fiscal year ending March 2025, underlining the economic weight of the partnership. The deal follows a series of recent trade agreements on both sides. The EU has signed pacts with Mercosur, Indonesia, Mexico, and Switzerland, while India has finalised agreements with Britain, New Zealand, and Oman.
Strategic Motivation
The surge in trade deals reflects broader global efforts to hedge against Washington as President Trump’s foreign and trade policies strain long-standing alliances. Trump’s threats to impose tariffs on European nations and his bid to take control of Greenland have unsettled Western partners. India has also been directly affected, with the U.S. imposing a 50% tariff on Indian goods and a bilateral India–US trade deal collapsing last year after diplomatic missteps.
What’s Next
The India–EU agreement will now undergo legal vetting, a process expected to take five to six months, according to an Indian government official. Formal signing will follow once the legal review is complete. Both sides expect the deal to be implemented within a year, opening the door to deeper trade integration and signalling a strategic shift in how India and Europe position themselves in a changing global economic order.
With information from Reuters.
