India-EU FTA: What you need to know about the historic deal
On January 27, 2026, India and the European Union finally finalized a massive Free Trade Agreement after 18 years of talks.
Announced during India's Republic Day celebrations, European Commission President Ursula von der Leyen called it the "mother of all deals," saying it has created a free trade zone of two billion people.
Why does this matter?
This FTA means big savings—EU exporters will save €4 billion a year thanks to lower or zero tariffs on most goods sent to India.
For young Indian businesses and consumers, it opens up more choices: cars get cheaper (tariffs drop from 110% to 10%), olive oil goes duty-free, and chemicals become more affordable.
On the flip side, Indian products like textiles can gain zero-duty access to Europe for many tariff lines, subject to the agreement's rules of origin and implementation schedules—plus, the EU is pitching in €500 million to help India cut emissions.
A nod to culture and sustainability
During the Republic Day events, leaders, including Ursula von der Leyen and PM Modi, twinned in traditional Eri silk scarves from Northeast India—a fabric known as "peace silk" because it's made without harming silkworms.
The Republic Day events also spotlighted crafts from eight Northeastern states, celebrating both tradition and eco-friendly practices.