DAVOS, Switzerland — The European Union is on the verge of finalizing a landmark free trade agreement (FTA) with India, European Commission President Ursula von der Leyen announced on Tuesday during her address at the World Economic Forum in Davos. While key details remain to be resolved, von der Leyen described the pact as potentially “historic,” noting its transformative potential for global commerce.
“There is still work to do. But we are on the cusp of a historic trade agreement,” von der Leyen said. “Some call it the ‘mother of all deals’ — one that would create a market of 2 billion people, accounting for almost a quarter of global GDP.”
The deal is expected to further strengthen economic ties between the EU and India — two of the world’s largest economies — and diversify international trade links amid shifting geopolitical currents.
Background: A Decades-Long Negotiation
The idea of a comprehensive EU–India free trade agreement has been under discussion for nearly two decades. Talks, which began in the mid-2000s and stalled for years, were resumed in earnest in 2022. A breakthrough now appears imminent, with both sides racing to clear remaining differences ahead of planned signings at upcoming summits.
Once concluded, the deal would not only boost market access for goods and services but also reinforce cooperation on regulatory standards, investment protection, and sustainable trade. It is being seen as a strategic counterweight to rising protectionism and geopolitical uncertainty.
Trade Between India and the EU: Figures Over the Past Three Years
The economic relationship between India and the European Union has grown substantially, with both sides emerging as critical trading partners:
- 2022: Bilateral trade in goods between the EU and India reached approximately €120 billion (about US$130 billion), making the EU one of India’s top export destinations.
- 2023: Trade remained robust, with overall merchandise trade reaching around €124 billion (roughly US$135 billion), and services trade nearing €60 billion.
- 2024–25: According to recent data, India–EU bilateral merchandise trade exceeded US$136 billion (about €125 billion) — with Indian exports to the EU around US$75.85 billion and imports from the EU approximately US$60.68 billion.
These figures reflect deepening economic integration between the subcontinent and the European bloc, covering everything from machinery and chemicals to services and technology. The EU currently stands as one of India’s largest trading partners, accounting for a significant share of its exports.
Strategic Dimensions Beyond Trade
The FTA talks are unfolding alongside broader strategic cooperation between India and the EU. The two sides are pursuing partnerships in security, defence, technology and climate action, highlighting a shared interest in strengthening multilateral ties and reducing dependence on singular supply chains.
With EU officials scheduled to visit New Delhi in the coming days to iron out final positions, global markets and policymakers will be watching closely. If approved, the agreement could be one of the most important trade pacts of the early 21st century. (Source: Reuters and Syndicate)
