India and European Union Forge Historic 'Mother of All Deals' in New Delhi Summit
The global economic spotlight is firmly on New Delhi today as Prime Minister Narendra Modi welcomes European Commission President Ursula von der Leyen and European Council President Antonio Costa for a pivotal summit. The centerpiece achievement is the finalization of a comprehensive Free Trade Agreement, a monumental pact that has been in the making since 2007 and gained renewed momentum in 2022. Dubbed the "Mother of all deals," this agreement is poised to establish the world's largest free trade zone, covering nearly 25% of the global population and significantly diversifying international supply chains away from an over-reliance on China.
Economic Impact and Market Access
The economic implications of this FTA are profound. In 2024 alone, bilateral trade in goods exceeded €120 billion, while services trade surpassed €66 billion. The agreement is strategically designed to drastically reduce India's historically high import duties, which have reached up to 150% in sectors such as transport and chemicals. This reduction will unlock the vast Indian market for approximately 6,000 European companies already operating within the country. Beyond tariffs, the deal encompasses critical areas like investment protection and geographical indications, reinforcing the EU's position as India's foremost foreign direct investor.
Strategic Security and Defence Partnership
In a significant expansion of their partnership, India and the EU are also set to sign a Security and Defence Strategic Partnership. This landmark agreement, only the third of its kind for the EU in Asia, follows the symbolic participation of EU naval personnel from Operations Atalanta and Aspides in India's Republic Day parade. The partnership will foster concrete cooperation in cybersecurity, counter-terrorism, and maritime safety, leveraging what President von der Leyen described as "complementary strengths" to build mutual resilience in an increasingly fragmented global landscape.
Mobility Pact and People-to-People Ties
Alongside the trade and defence agreements, the summit will introduce a new cooperation framework on mobility. This pact aims to support the 9,000 Indian nationals currently in Europe and facilitate the movement of students, seasonal workers, and highly skilled professionals. By streamlining visa processes and enhancing professional recognition, the framework seeks to deepen people-to-people connections, which leaders emphasize as a central pillar of the partnership. With trade in services experiencing a 243% growth over the past decade, this mobility agreement is expected to further boost expertise exchange in telecommunications, computer services, and management consulting.
Comprehensive Strategic Agenda and Future Timeline
Prime Minister Modi and EU leaders will also adopt the "Joint EU-India Comprehensive Strategic Agenda" for 2026-2030. This roadmap focuses on four key pillars: prosperity and sustainability, technology and innovation, security and defence, and connectivity. While the political consensus has been reached, the legal scrubbing of the FTA text will continue for the next five to six months, with the agreement anticipated to enter into force in early 2027. This timeline underscores a commitment to a rules-based international order and marks a historic turning point in India-EU relations.
