PM Modi Announces Signing of Landmark India–EU Free Trade Agreement

New Delhi (Economy India): Prime Minister Narendra Modi on Tuesday announced the signing of the India–European Union Free Trade Agreement (FTA), calling it a historic milestone that covers 25 per cent of global GDP and nearly one-third of global trade, and opens unprecedented opportunities for businesses and citizens on both sides.

Addressing the Indian Energy Week virtually, the Prime Minister congratulated stakeholders involved in the negotiations and described the agreement as a transformative development in India’s global economic engagement.

“I am informing you about a big development… a significant agreement was signed between India and Europe yesterday,” Modi said, adding that the deal is being widely discussed as the ‘mother of all trade agreements’.

A Game-Changing Global Trade Pact

The India–EU FTA is one of the largest and most comprehensive trade agreements signed by India to date, linking the world’s fastest-growing major economy with one of its largest and most advanced economic blocs.

Prime Minister Modi said the agreement would unlock massive opportunities for 140 crore Indians and crores of Europeans, strengthening trade, investment, innovation, and supply chain resilience at a time of global economic uncertainty.

The deal is expected to significantly boost:

• Bilateral trade in goods and services
• Cross-border investments
• Technology and innovation partnerships
• Green energy and climate cooperation
• Job creation and MSME growth

Strategic and Economic Significance

Policy experts say the agreement marks a turning point in India–EU relations, elevating them from a traditional trade partnership to a long-term strategic economic alliance. The EU is already one of India’s largest trading partners, while India has emerged as a key destination for European manufacturing, clean energy, and digital investments.

The FTA is also strategically important amid:

• Global supply chain realignments
• Rising protectionism in major economies
• Efforts to reduce overdependence on single markets
• Increasing emphasis on trusted trade partners

By formalising deeper economic integration with the EU, India strengthens its position as a reliable global manufacturing and services hub.

Boost to Key Indian Sectors

Industry sources indicate that the agreement will provide enhanced market access for several Indian sectors, including:

• Textiles and apparel
• Pharmaceuticals and healthcare
• Engineering goods and automobiles
• IT and digital services
• Renewable energy and green technologies

At the same time, the pact is expected to attract large-scale European investments into India’s infrastructure, clean energy, electric mobility, and advanced manufacturing ecosystems.

Years of Negotiations Culminate in Deal

The signing of the FTA follows years of complex negotiations, which were resumed in 2022 after a long pause. Talks covered sensitive areas such as tariffs, services, investment protection, intellectual property, sustainability standards, and digital trade.

The government has consistently maintained that India would enter trade agreements only if they are balanced, equitable, and aligned with national interests—a principle reiterated by Commerce and Industry Minister Piyush Goyal on multiple occasions.

A New Chapter in India’s Trade Diplomacy

The India–EU FTA adds to India’s expanding network of global trade agreements, following recent pacts with Australia, the UAE, and EFTA nations, and ongoing negotiations with the UK, Canada, and the Gulf Cooperation Council.

Analysts believe the agreement could serve as a template for future high-quality FTAs, reinforcing India’s integration into global value chains while safeguarding domestic industries.

As Prime Minister Modi noted, the deal is not just a trade agreement but a strategic investment in shared prosperity, positioning India and Europe for long-term growth in a rapidly changing global economy.

(Economy India)