India and the EU announce a landmark trade pact creating a two-billion-person market, cutting tariffs on 97% of EU exports and boosting key sectors.
NEW DELHI: India and the European Union have announced a historic trade pact, concluding two decades of negotiations.
Prime Minister Narendra Modi hailed the “mother of all deals” in New Delhi alongside European Commission President Ursula von der Leyen and European Council President Antonio Costa.
The agreement creates a combined market of two billion people, representing about 25% of global GDP and one-third of global trade.
The EU said the pact will cut or eliminate tariffs on almost 97% of European exports, saving up to 4 billion euros annually in duties.
“This deal will bring many opportunities for India’s 1.4 billion and many millions of people of the EU,” Modi said.
Von der Leyen stated the deal establishes a free trade zone where “both sides are set to benefit”.
She added that the EU would “gain the highest level of access ever granted to a trade partner in the traditionally protected Indian market”.
Key Indian tariffs will be dramatically reduced under the agreement.
Car import duties will be lowered from a top rate of 110% to as low as 10%, while wine tariffs will drop from 150% to 20%.
Tariffs on processed foods like pasta and chocolate, currently at 50%, will be eliminated entirely.
The EU expects its exports to India to double, with European companies gaining privileged access to Indian financial services and maritime transport.
For India, the deal is seen as a vital source of technology and investment to scale infrastructure and create jobs.
Modi said it would boost sectors including textiles, gems and jewellery, leather goods, and services.
Bilateral trade in goods reached 120 billion euros in 2024, a near 90% increase over the past decade.
The accord is viewed as a strategic move by both Brussels and New Delhi to diversify markets amid US tariffs and Chinese export controls.
“India and Europe have made a clear choice,” von der Leyen wrote on social media.
“We are showing a fractured world that another way is possible.”
