India-EU FTA: After almost two decades of negotiations, India and the European Union will finally be signing the Free Trade Agreement, on Tuesday. Both sides have called the FTA the ‘Mother of all deals’, as it is a major step for the partnership between the two nations. India and the EU together, account for nearly one-fifth of global trade and about 25% of the world’s population.”The announcement is expected at the EU-India summit, where leaders are also likely to adopt a joint comprehensive strategic agenda. The discussions will be focused on trade, linked to the free trade agreement negotiations that were first launched in 2007, revived in 2022 and concluded this week.
Ahead of the Summit, European Commission President Ursula von der Leyen highlighted the significance of the partnership, “India and Europe have made a clear choice. The choice of strategic partnership, dialogue and openness. Leveraging our complementary strengths. And building mutual resilience. We are showing a fractured world that another way is possible.”Highlighting India’s trade with the bloc, European Council President Antonio Costa said, “India is a crucial partner for the EU. Together, we share the capacity and responsibility to protect the rules-based international order.”
India-EU trade
The two nations have seen their bilateral goods trade has doubling over the past ten years. EU imports from India recorded a growth of 140%, while EU exports to India rose by 58%. The EU is currently India’s second-largest trading partner in terms of trade goods, accounting for 11.5% of India’s total goods trade. Back in 2024, EU-India goods trade crossed €120 billion. EU’s imports from India were valued at €71.4 billion, while exports to India amounted to €48.8 billion.EU’s exports to India majorly consist of machinery and appliances, transport equipment and chemicals. At the same time, the bloc’s imports from India machinery and appliances, chemicals and fuels dominate EU imports from India. Services trade has followed a similar upward trend, over the corresponding period. Trade in services between the EU and India exceeded €66 billion, including more than €37 billion in EU imports and around €29 billion in exports. Over the last ten years, services trade has more than doubled, registering growth of 243%. Telecommunications, computer and information services, professional and management consulting, and transport services are among the key sectors involved.Investment ties further highlight the scale of engagement. In 2024, the EU’s foreign direct investment in India stood at over €132 billion, positioning the bloc as India’s leading foreign investor.Negotiations for the free trade agreement were relaunched in June 2022, alongside parallel talks on investment protection and geographical indications. The trade discussions aim to remove barriers, boost exports and open up services, reinforcing the economic foundation of the India-EU partnership.
