The European Union and India are set to formally sign a landmark free trade agreement by the end of 2026, European Commission President Ursula von der Leyen announced following her meeting with Prime Minister Narendra Modi on the sidelines of the G7 Summit in France.
Von der Leyen said both sides are moving quickly to implement commitments made under the agreement, which is expected to significantly deepen economic ties between the world’s largest democracy and one of the world’s biggest trading blocs.
“Since we have concluded the mother of all trade deals, we have been moving fast to deliver on our commitments. We will sign the Free Trade Agreement by the end of the year,” von der Leyen wrote on social media after meeting Modi.
The agreement, reached in January after years of negotiations, is designed to boost bilateral trade, reduce tariff barriers and strengthen economic cooperation amid rising global trade tensions and growing efforts by both sides to diversify supply chains and reduce dependence on the United States and other major markets.
Once formally signed, the deal is expected to come into force in 2027.
According to European Union estimates, the agreement will eliminate or reduce tariffs on 96.6 per cent of goods traded between the two economies by value. The EU projects the pact will double European exports to India by 2032 while generating approximately €4 billion in annual tariff savings for European businesses.
The trade agreement is widely regarded as one of the most significant economic partnerships negotiated by the European Union in recent years. It is expected to expand market access across a range of sectors, including manufacturing, technology, pharmaceuticals, clean energy, automotive products and services.
For India, the agreement is expected to provide greater access to European markets, attract investment and support the country’s ambitions to become a global manufacturing and export hub.
The announcement came as Prime Minister Modi held a series of bilateral meetings at the G7 Summit, with trade, investment, supply-chain resilience and economic security featuring prominently on the agenda.
The India-EU trade deal marks a major milestone in relations between the two partners and is expected to reshape trade flows between Europe and one of the world’s fastest-growing major economies over the coming decade.
