Amid global economic uncertainties, India successfully signed a free trade agreement (FTA) with the European Union (EU) on Tuesday in New Delhi. The deal is crucial as it comes at a time when India is already pushing hard to break a trade deal with the US, India’s largest trading partner.

The deal was signed by Prime Minister Narendra Modi, European Council President António Costa, and European Commission President Ursula von der Leyen during the India-EU Summit.

Notably, the agreement is not limited to imports and exports but covers a wide range of areas, including defence and security, skilling and mobility, and disaster management. The two parties also agreed to push joint projects in areas such as clean energy, science & technology, and research & innovation.

Highlighting the importance of the deal, Munjal Almoula, Managing Partner – Tax & Regulatory Advisory, BDO India, said that the deal may double India-EU trade by 2032.

“Textiles, gems & jewellery, leather, pharma, and high-tech engineering will surge, and it is expected to double to $136B in bilateral trade by 2032, amid the ongoing US tariff disruptions, while easing professional mobility and data-secure status for India’s services edge. This multipolar pivot fuses EU precision manufacturing with India’s scale, redefining resilient supply chains ahead of the 2027 rollout,” Almoula said.

India-EU FTA: List of outcomes:

• Towards 2030: A Joint India-European Union Comprehensive Strategic Agenda