‘Mother of all deals’: EU signals imminent trade agreement with India

The European Union is on the cusp of signing a historic trade agreement with India, described as “the mother of all deals”, European Commission President Ursula von der Leyen said on Tuesday, asserting that it would create a market of around 2 billion people, accounting for nearly one-fourth of global GDP.

Speaking in a special address at the World Economic Forum Annual Meeting here, von der Leyen said the deal would provide Europe with a crucial first-mover advantage with one of the world’s fastest-growing and most dynamic regions.

“Right after Davos, I will travel to India. There is still work to do. But we are on the cusp of a historic trade agreement. Some call it the mother of all deals,” she said.

“Europe wants to do business with the growth centres of today and the economic powerhouses of this century.

“From Latin America to the Indo-Pacific and far beyond, Europe will always choose the world. And the world is ready to choose Europe,” she added.

President of the European Council Antonio Costa and von der Leyen will be in India from January 25 to 27 to attend the Republic Day celebrations as chief guests and hold summit talks with Prime Minister Narendra Modi.

The two sides are expected to announce the conclusion of negotiations on the long-pending free trade agreement at the India-EU summit on January 27.

Von der Leyen also said the European Union is working on a new free trade agreement with Australia.

“We are also advancing with the Philippines, Thailand, Malaysia, the UAE – and more,” she said.

She further said Europe would continue to stand with Ukraine until there is a just and lasting peace.

The European Union is India’s largest trading partner, with bilateral trade in goods amounting to USD 135 billion in the financial year 2023–24. The proposed free trade agreement is expected to significantly strengthen trade ties.

The agreement is expected to bring a qualitative shift in deepening overall bilateral relations across multiple sectors, at a time when global trade is witnessing disruptions amid Washington’s tariff policies.

In addition to the free trade agreement, the two sides are likely to unveil a defence framework pact and a strategic agenda at the summit.

India and the European Union have been strategic partners since 2004.

The ambitious free trade agreement is being finalised amid rising concerns over Washington’s trade and tariff policies, which have affected both India and the 27-nation European Union.

India and the EU are also expected to unveil a joint comprehensive strategic vision that will guide bilateral relations for the period 2026–2030.

Negotiations for the India-EU free trade agreement were first launched in 2007 but were suspended in 2013 due to differences in ambition. Talks were relaunched in June 2022.

The proposed Security and Defence Partnership (SDP) is aimed at strengthening defence and security cooperation between the two sides.

The SDP is expected to enhance interoperability in the defence domain and open avenues for Indian companies to participate in the EU’s SAFE (Security Action for Europe) programme. SAFE is the European Union’s Euro 150 billion financial instrument designed to support member states in accelerating defence readiness.

At the summit, India and the EU are also set to launch negotiations for a Security of Information Agreement (SOIA), which is expected to boost industrial defence cooperation.

(With inputs from agencies)