India and the European Union Finalize Historic Free Trade Agreement
📍 Brussels, Belgium| India | 3 February 2026 | The Global Journal
India and the European Union (EU) have finalized a historic Free Trade Agreement (FTA), which is set to elevate economic partnership between the two largest democracies to a new level. Under the agreement, tariffs on most goods will be significantly reduced or completely eliminated, making it the largest free trade deal ever concluded between India and the EU.
According to the European Commission, once implemented, the agreement could double EU exports to India by 2032. Tariffs will be reduced or eliminated on approximately 96.6% of traded goods by value, potentially saving European companies an estimated 4 billion euros annually.
In return, the EU will phase out tariffs on approximately 99.5% of goods imported from India over the next seven years. This includes key Indian exports such as marine products, leather and textile goods, chemicals, rubber, base metals, and gems and jewellery.
European Commission President Ursula von der Leyen described the agreement as historic, saying,
“Today, the European Union and India have made history. The partnership between the world’s two largest democracies has deepened. We have created a free trade zone for 2 billion people, where both sides will benefit economically. This demonstrates that rules-based international cooperation can still deliver major successes.”
The agreement will now be submitted to the European Council for signature and final approval. Once the Council approves, India and the EU can formally sign the deal. However, it will only come into effect after ratification by the European Parliament and India’s internal approval processes.
Notably, trade talks between India and the EU have been ongoing for nearly two decades. Recent global political and economic tensions have accelerated the discussions. Analysts note that the EU is keen to reduce its dependence on the United States and strengthen ties with Asia and other emerging markets.
Earlier this month, the EU signed a free trade agreement with the four founding countries of the Mercosur customs union in South America. Last year, it also announced a trade and investment deal with Indonesia, reflecting the EU’s active role in global trade strategy.
