EU, India Seal ‘Mother Of All Deals’ Trade Pact Creating 2-billion-person Market

India and the European Union (EU), on Tuesday, announced a landmark free trade agreement described by Prime Minister Narendra Modi as the “mother of all deals,” concluding nearly two decades of negotiations.

The pact will create one of the world’s largest free trade zones, covering a combined market of about two billion people. Leaders on both sides said the agreement was aimed at strengthening economic ties and reducing dependence on the world’s two biggest economies, the United States and China.

Under the deal, tariffs on almost 97 per cent of European exports to India will be reduced or completely eliminated, a move the 27-member EU bloc estimates will save European businesses up to €4 billion ($4.75 billion) each year in customs duties.

Modi announced the agreement in New Delhi after meeting with European Commission President Ursula von der Leyen and European Council President Antonio Costa. He said the deal would unlock significant opportunities for India’s 1.4 billion citizens as well as millions across the EU, adding that the agreement covers economies representing roughly 25 per cent of global GDP and nearly one-third of global trade.

European leaders also hailed the pact as historic. Von der Leyen said Europe and India were “making history” by establishing a massive free trade zone that would deliver benefits to both sides. She and Costa were guests of honour at India’s Republic Day celebrations a day earlier.

EU officials described the agreement as the most ambitious trade deal India has ever signed, noting that European companies would enjoy a “first-mover advantage” in the Indian market. Key European sectors expected to benefit include agriculture, automotive manufacturing and services.

For India, the EU is seen as a vital partner for attracting advanced technology and investment needed to scale up infrastructure and generate millions of new jobs.