'Biggest FTA in our history': Modi as India-EU seal pact
What's the story
India and the European Union on Tuesday signed a trade pact, which Indian Prime Minister Narendra Modi called the "biggest FTA in our history." "There is turmoil in the global order; in this condition, India-EU cooperation will strengthen stability in the international system. We discussed many global issues, including Ukraine....This is the moment when we are starting a new chapter in our relationship between India and the EU," PM Modi said.
Leaders
Taking partnership to the next level
The official documents were exchanged between EU Trade Commissioner Maros Sefcovic and Union Commerce Minister Piyush Goyal. Speaking for the European side, President of the European Council Antonio Costa said India and the EU "stand together as strategic and reliable partners... and we are taking our partnership to the next level, to shape a resilient global order that enables peace and stability." "India is the fastest growing economy and today's FTA is of historic importance (for Europe)," he said.
Defense
First-ever security and defense partnership
At the joint press conference, European Commission President Ursula Von Der Leyen said India and the EU are not only making their economies stronger but also "delivering security for our people." "Today, the world's two largest economies and democracies launched their first-ever security and defense partnership," she announced. She noted that Europe and India share a long history of cooperation in the defense industry and emphasized that this new framework will strengthen their collective resilience against emerging global threats.
Economic impact
FTA to boost India-EU trade relations
The FTA is expected to give a major boost to bilateral trade between India and the EU, which is one of India's largest trading partners. In 2024-25, India's bilateral trade with the EU stood at ₹11.5 lakh crore (approximately $136.54 billion). The agreement is likely to enhance market access for Indian exports by over 99% by trade value into the EU, further strengthening economic ties.
Sector coverage
FTA covers diverse sectors, boosts labor-intensive industries
The India-EU FTA covers a wide range of sectors, including textiles, apparel, leather and footwear. Tariffs on nearly $33 billion worth of exports in these sectors will be reduced to zero upon the agreement's enforcement. The pact also includes provisions for trade in goods and services, customs facilitation and digital trade. It is expected to empower workers and integrate Indian businesses into global value chains.
Market access
FTA enhances India's competitiveness, secures market access
The FTA is also expected to enhance India's competitiveness on the global stage by unlocking high-value commitments in services. It gives predictable access to the EU's 144 subsectors for Indian service providers. This will enable them to provide competitive world-class services while bringing high-tech services and investment from the EU into India.
Additional provisions
FTA includes provisions for mobility, financial services
The FTA also includes a framework for business mobility between India and the EU. This covers short-term travel and provides commitments for intra-corporate transferees and business visitors. In financial services, it promotes cooperation to advance innovation while providing enhanced market access across major EU member states. These provisions are expected to deepen financial integration and support trade growth in these sectors.