India and the European Union are on the verge of finalizing a significant free trade agreement (FTA), with an official announcement expected on January 27, following the Republic Day celebrations. The upcoming India-EU summit is set to mark the successful conclusion of FTA negotiations, with both sides adopting a document to announce the agreement’s finalization. Subsequently, the FTA will undergo necessary legal procedures and ratification by the European Parliament and Council.
Additionally, a security and defense partnership agreement, along with a pact to improve mobility for Indian professionals seeking employment in the EU, are also likely to be signed during the summit. European Council President Antonio Costa and European Commission President Ursula von der Leyen will be the chief guests at India’s 77th Republic Day celebrations before co-chairing the summit.
For the first time, a military contingent from the EU will participate in India’s Republic Day parade, showcasing the strengthening bilateral strategic ties. The trade deal, described by Commerce Minister Piyush Goyal as the “mother of all deals,” will be the largest ever signed by India, encompassing goods and services with the 27-nation European Union.
The agreement, uniting two of the world’s largest democratic economies, is significant amid global economic uncertainties arising from US tariff disputes and geopolitical tensions. The European Union stands as India’s largest trading partner, with trade in goods valued at $135 billion in FY24. The FTA is anticipated to provide additional market access and economic synergies, although discussions continue on sensitive areas like the EU’s Carbon Border Adjustment Mechanism (CBAM).
India is advocating for zero-duty access for its labor-intensive sectors such as textiles, leather, apparel, gems and jewelry, and handicrafts. Commerce Minister Piyush Goyal recently announced that talks for the trade agreement with the EU have reached the final stage, following his discussions in Brussels with EU Trade and Economic Security Commissioner Maros Sefcovic. The focus remains on establishing a rules-based trading framework and a modern economic partnership that supports farmers, MSMEs, and integrates Indian industries into global supply chains.
