India, EU near mega trade deal as FTA talks reach final stage
After prolonged deliberations over a decade, the broad-based FTA is expected to catalyse strengthening economic ties between the two regions.
The talks on the ‘mother of all deals,’ a long-pending free trade agreement between India and the European Union, are expected to conclude on January 27, marking a landmark in India’s trade position with the European Union.
After prolonged deliberations over a decade, the broad-based FTA is expected to catalyse strengthening economic ties between the two regions.
To seal the deal and deepen cooperation across trade, security and defence, the European Council President António Costa, the European Commission President Ursula von der Leyen and the European Union foreign policy chief Kaja Kallas have come to India.
Notably, EU chief Ursula will be the Chief Guest at India’s 77th Republic Day celebrations on January 26, 2026.
India, EU building strategic partnership
While uncertainty prevails in global trade, the India-EU agreement is likely to give a strong push to India’s export growth. It may raise India’s trade surplus with the European Union by over $50 billion by FY31.
Experts suggest that the EU’s share in India’s total exports may also surge from 17.3 % in FY25 to around 22–23 %, following the agreement.
The FTA holds significance for Europe as well. India accounts for just 0.8 % of the EU’s export market at present.
In the past few years, the EU’s trade surplus with India has reduced to a trade deficit of $15 billion in FY25 from $3 billion in FY19.
Furthermore, the India-EU deal will help Europe achieve its objective of shrinking its reliance on China and diversifying its global supply chains.
The change in growth figures is expected as the agreement allows a change in the type of India’s exports to the EU.
Following the free trade agreement, India will be able to export a larger percentage of higher-value products, such as electronics, machinery and chemicals.
Earlier, trade was dominated by the export of traditional labour-intensive goods.
This is expected to improve the EU’s share in India’s exports, which has dropped to 16.8 % so far in FY26.
All in all, the India-EU FTA is expected to make trade cheaper and more predictable.
The Statesman
Asia News Network
