New Delhi: Prime Minister Narendra Modi on Tuesday announced that India and the European Union have concluded a free trade agreement (FTA), noting that the partnership accounts for 25 per cent of global GDP and nearly one-third of global trade.
Describing it as the “mother of all deals,” Modi said the agreement opens up vast opportunities for 140 crore Indians as well as millions of Europeans. Addressing the Indian Energy Week virtually, he congratulated all stakeholders on the India–EU trade pact and said, “I am sharing a major development… just yesterday, a very significant agreement was reached between India and the European Union.”
“This is a strong example of coordination between two major global economies. Together, this agreement represents 25 per cent of global GDP and one-third of global trade,” he said. He added that the FTA with the EU would complement India’s existing agreements with the United Kingdom and the European Free Trade Association (EFTA).
The agreement, he said, will strengthen global trade as well as supply chains. Congratulating the youth and those associated with sectors such as textiles, gems and jewellery, leather, and footwear, Modi stated that the pact would prove highly beneficial, boosting manufacturing in India while further expanding the services sector.
Prime Minister Narendra Modi and European Commission President H.E. Ursula von der Leyen today jointly announced the conclusion of the India–European Union Free Trade Agreement (India–EU FTA) at the 16th India–EU Summit, held during the visit of the European leaders to India. This announcement marks a historic milestone in India–EU economic relations and trade engagement with key global partners.
The conclusion of this FTA positions India and the European Union as trusted partners committed to open markets, predictability, and inclusive growth.
The FTA comes after intense negotiations since the re-launch of negotiations in 2022. The announcement of the FTA today marks the culmination of years of sustained dialogue and cooperation between India and the EU, demonstrating the political will and shared vision to deliver a balanced, modern, and rules-based economic and trade partnership.
The European Union is one of India’s largest trading partners, with bilateral trade in goods and services growing steadily over the years. In 2024–25, India’s bilateral trade in goods with the EU stood at INR 11.5 lakh crore (USD 136.54 billion), with exports worth INR 6.4 lakh crore (USD 75.85 billion) and imports amounting to INR 5.1 lakh crore (USD 60.68 billion). India–EU trade in services reached INR 7.2 lakh crore (USD 83.10 billion) in 2024.
India and the EU are the 4th and 2nd largest economies respectively, comprising 25% of global GDP and accounting for one-third of global trade. Integration of the two large, diverse, and complementary economies will create unprecedented trade and investment opportunities.
Union Minister for Commerce and Industry, Piyush Goyal, lauded the strategic vision and steadfast leadership of Prime Minister Narendra Modi. He stated:
“The conclusion of the India–European Union Free Trade Agreement represents a defining achievement in India’s economic engagement and global outlook. This supports India’s approach to secure trusted, mutually beneficial, and balanced partnerships.
Beyond a conventional trade deal, it represents a comprehensive partnership with strategic dimensions and is one of the most consequential FTAs. India has secured unprecedented market access for more than 99% of Indian exports by trade value to the EU, which also bolsters the ‘Make in India’ initiative. Beyond goods, it unlocks high-value commitments in services complemented by a comprehensive mobility framework enabling seamless movement of skilled Indian professionals.
India, powered by a young and dynamic workforce and one of the fastest-growing major economies, stands poised to leverage this FTA to create jobs, spur innovation, unlock opportunities across sectors, and enhance its competitiveness on the global stage.”
The India–EU trade pact covers conventional areas such as trade in goods, services, trade remedies, rules of origin, customs and trade facilitation, as well as emerging areas such as SMEs and digital trade, among others.
The India–EU FTA gives a decisive boost to labour-intensive sectors such as textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineering goods, and automobiles, bringing down tariffs of up to 10% on almost USD 33 billion of exports to zero upon entry into force of the Agreement. Beyond enhancing competitiveness, it empowers workers, artisans, women, youth, and MSMEs, while integrating Indian businesses more deeply into global value chains and reinforcing India’s role as a key player and supplier in global trade.