'New blueprint for shared prosperity': Modi on India-EU trade deal
What's the story
Prime Minister Narendra Modi and European Commission President Ursula von der Leyen jointly announced the conclusion of the India-European Union Free Trade Agreement (India-EU FTA) at the 16th India-EU Summit on Tuesday. The FTA, which is yet to be formally signed and ratified, is being hailed as a "new blueprint for shared prosperity." It will give Indian farmers and small industries easier access to European markets and boost investment between India and the EU.
Celebration
'Mother of all deals': EU leaders celebrate trade agreement
European Council President Antonio Costa and European Commission President Ursula von der Leyen joined PM Modi for the announcement. Von der Leyen called it the "mother of all deals," creating a market of two billion people. She emphasized that this trade agreement will integrate supply chains and strengthen joint manufacturing power, cutting up to €4 billion in annual tariffs for exporters.
Security
Trade agreement to deepen security cooperation
The trade agreement also includes a Security and Defense Partnership, which will enhance cooperation in counter-terrorism, maritime security, and cyber security. This partnership is expected to open doors for defense industrial cooperation between India and the EU. PM Modi said this move will expand their cooperation in the Indo-Pacific region and provide new opportunities for co-development and co-production of military hardware.
Trade impact
Trade agreement to boost bilateral trade and exports
The India-EU trade was worth $136.5 billion in the fiscal year ending March 2025. The EU is currently India's largest trading partner, accounting for €120 billion in goods trade in 2024. Once ratified, the FTA could expand bilateral trade and boost Indian exports such as textiles and jewelry, which have been impacted by US tariffs.
Roadmap
New roadmap to drive India-EU partnership
A new comprehensive strategic agenda was also unveiled to drive the India-EU partnership over the next five years. Costa, who has roots in Goa, said this summit sends a message of strategic partnership at a time of global order reshaping. "As the two largest democracies in the world, we are working hand-in-hand to deliver concrete benefits for our citizens and to shape a resilient global order that underpins peace and stability, economic growth and sustainable development," he said.
FTA
FTA reduce tariffs on over 96% of EU goods exports
The Free Trade Agreement grants privileged access for EU exports to the world's most populous country of 1.45 billion people. It will potentially double EU goods exports to India by 2032 and eliminate or reduce tariffs on over 96% of EU goods exports. It will also reduce prohibitive tariffs on key EU agri-food products like wine, olive oil, chocolate, and pastries, saving around €4 billion every year in duties on European products.