In a major achievement for the Indian economy, India and the European Union on Tuesday signed a much awaited free trade agreement (FTA) at the India-EU Summit 2026 in New Delhi. The deal grants preferential entry to 99% Indian exports into the EU, while India cuts tariffs by 97% on European imports. The agreement is expected to come into effect by next year. 

Speaking after the signing, Prime Minister Narendra Modi said the world is facing serious uncertainty and stressed the need for stronger partnerships and reforms in global institutions.

“Today, there are major turmoils in the global order. In such a situation, the partnership between India and the European Union will strengthen stability in the international system,” Modi said.

During the event, European Commission President Ursula von der Leyen described the agreement as a “mother of all deals.” 

"Prime Minister, distinguished friend, we did it, we delivered the mother of all deals," Von Der Leyen said, adding that the agreement would create a market of 2 billion people. Further, she drew similarities between India and the EU and said that they both chose partnership in a "win-win" fashion,” she said. 

PM Modi also said leaders from both sides held detailed talks on important global and regional issues, including the war in Ukraine, the situation in West Asia, and developments in the Indo-Pacific region.

“In that context, today we held detailed discussions on several global issues, including Ukraine, West Asia, and the Indo-Pacific. Respect for multilateralism and international norms is our shared priority. We also agree that to address today's challenges, global institutions need reform,” he added.

Key points of the EU-trade deal

Under this deal, tariffs on almost 97% of European exports to India will be cut or removed. This means many products from Europe could become cheaper for Indian consumers in the coming years.

The agreement says tariffs on 96.6% of goods exported by the European Union will either be fully removed or reduced. For some products, the tariff has been removed completely.

These include machinery and electrical equipment, aircraft and spacecraft. Processed food items such as bread, pastries, biscuits, pasta, chocolate, and pet food will also now face zero tariff under the deal.

When will the deal take effect? 

Although India and the EU have completed negotiations and signed the agreement, the trade deal is expected to come into force sometime next year, government officials said.