India–EU FTA: Why the “Mother of All Deals” Marks India’s Global Economic Moment

The India–European Union Free Trade Agreement (FTA), widely described as the “mother of all deals,” marks a historic milestone in India’s economic and strategic engagement with the world. Announced at the 16th India–EU Summit by Prime Minister Narendra Modi and European Commission President Ursula von der Leyen, the agreement comes at a time of global uncertainty—supply chains are under strain, trade fragmentation is intensifying, and geopolitical fault lines are deepening.

In choosing a path anchored in openness, trust, and long-term partnership, India and the EU signal a forward-looking approach that balances economic ambition with stability.

A Historic Agreement by Scale and Substance

India, now the world’s fourth-largest economy, and the EU, the second-largest, together account for nearly 25% of global GDP and roughly one-third of global trade. The conclusion of this FTA, after negotiations relaunched in 2022, reflects strong political will on both sides to establish a modern, rules-based trade framework that addresses contemporary global challenges.

India’s Economic Ascent Under Strategic Leadership

For India, the FTA is more than a trade pact. It is a strategic affirmation of India’s rising economic stature under Prime Minister Modi. Over the past decade, India’s trade policy has evolved from cautious engagement to confident, calibrated integration—securing market access while safeguarding domestic priorities.

"More than 99% of Indian exports by trade value will gain preferential access to the EU market," unlocking opportunities for textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineering goods, and automobiles.

Elimination of tariffs ranging from 4% to as high as 26% could accelerate exports worth nearly USD 33 billion, creating jobs, boosting MSME growth, and strengthening value-chain integration.

Crucially, sensitive sectors like dairy and select agricultural products are protected, ensuring export growth does not compromise domestic stability.

Why the Deal Matters for Europe

For the EU, the agreement provides sustained access to one of the fastest-growing major economies amid stagnating traditional markets.

• Over 92% of tariff lines are covered, with phased liberalisation enabling domestic industry adjustment

• European firms gain opportunities in high-tech goods and advanced services

• Indian manufacturing benefits from investment, technology transfer, and cost efficiencies

Strategically, the EU’s commitment underscores India’s role as a stable and indispensable economic partner in the Indo-Pacific and beyond.

Services, Mobility, and the Power of Talent

A key forward-looking element of the FTA lies in services and mobility, sectors critical to global trade.

• The EU offers market access across 144 services sub-sectors, including IT, professional services, education, finance, tourism, and business services.

• A comprehensive mobility framework facilitates movement of business visitors, intra-corporate transferees, contractual service providers, independent professionals, and dependents.

• Commitments to student mobility, post-study work, and future social security agreements strengthen people-to-people ties.

Additionally, the agreement includes provisions for practitioners of Indian traditional medicine to work in EU member states where regulations allow—a uniquely Indian cultural and economic dimension.

A Signal to the Global Order

Beyond tariffs and market access, the FTA sends a strong message to the world.

"At a time when protectionism and economic nationalism are resurging globally, the India–EU FTA demonstrates that large economies can still choose cooperation over confrontation," reflecting confidence in India’s macroeconomic stability, regulatory predictability, and reform trajectory.

Aligned with the vision of “Viksit Bharat 2047,” the agreement positions India as a rule-shaper, a trusted partner, and a key player in global trade. For Europe, it anchors engagement with a high-growth economy of the future, and for the world, it proves that open, balanced, and forward-looking trade agreements remain possible.

Conclusion

The India–EU Free Trade Agreement is not just a commercial milestone—it is India’s declaration of economic moment, signaling its rise as a global trade powerhouse. As India opens the broader European market to exporters, entrepreneurs, and talent, the deal reinforces the country’s position on the global economic stage and exemplifies a model for future trade partnerships.