The European Union and India are on the brink of finalising a landmark Free Trade Agreement (FTA) that could create a combined market of nearly two billion people, representing around one-fourth of global GDP. European Commission President Ursula von der Leyen on Tuesday described the proposed pact as “the mother of all deals,” underscoring its scale and strategic importance.
Speaking at a special address at the World Economic Forum (WEF) Annual Meeting in Davos, von der Leyen said the agreement would give Europe a crucial first-mover advantage with one of the world’s fastest-growing major economies.
“Right after Davos, I will travel to India. There is still work to do, but we are on the cusp of a historic trade agreement,” she said, adding that Europe is keen to deepen engagement with the growth centres of this century.
“From Latin America to the Indo-Pacific and far beyond, Europe will always choose the world—and the world is ready to choose Europe.”
European Council President Antonio Costa and von der Leyen will visit India from January 25 to 27 as chief guests for the Republic Day celebrations. The visit will culminate in the India–EU Summit on January 27, where both sides are expected to announce the conclusion of negotiations on the long-pending FTA.
The European Union is currently India’s largest trading partner, with bilateral trade in goods amounting to USD 135 billion in FY 2023–24. The proposed agreement is expected to significantly boost trade, investment, and supply-chain integration across multiple sectors, particularly at a time of heightened global trade disruptions driven by evolving tariff policies in the United States.
Beyond trade, the summit is also likely to see the unveiling of a Defence Framework Pact and a broader strategic agenda. India and the EU, strategic partners since 2004, are expected to launch a Joint Comprehensive Strategic Vision for 2026–2030, setting the course for deeper cooperation in trade, technology, security, and sustainability.
A key highlight is the proposed Security and Defence Partnership (SDP), aimed at enhancing defence and security cooperation and improving interoperability between the two sides. The SDP is expected to open avenues for Indian companies to participate in the EU’s SAFE (Security Action for Europe) programme—an ambitious €150 billion financial instrument designed to accelerate defence readiness across the bloc.
Additionally, India and the EU are set to launch negotiations on a Security of Information Agreement (SOIA), which would facilitate closer industrial defence collaboration.
FTA negotiations between India and the EU were first launched in 2007 but were suspended in 2013 due to differences in ambition and scope. Talks were formally relaunched in June 2022 and have since gained momentum amid shared concerns over global trade uncertainties.
Von der Leyen also noted that the EU is pursuing new trade agreements with Australia and advancing negotiations with partners including the Philippines, Thailand, Malaysia, and the UAE. Reaffirming Europe’s geopolitical stance, she added that the EU would continue to stand with Ukraine until a “just and lasting peace” is achieved.
If concluded as expected, the India–EU FTA would mark one of the most significant trade agreements globally, reshaping economic ties between two major economic blocs and setting a new benchmark for strategic cooperation in the years ahead.
