India, EU Seal Historic Trade Deal as Global Alliances Shift
India and the European Union have concluded negotiations on a long-awaited free trade agreement, marking a major milestone in bilateral relations as both sides navigate strained ties with the United States. The deal, described by officials as balanced and forward-looking, will be formally signed after legal vetting over the next five to six months and is expected to be implemented within a year. Together, India and the EU represent a quarter of global GDP and a combined market of around 2 billion people.
The agreement aims to boost trade and investment between the two partners, whose bilateral trade stood at $136.5 billion in the fiscal year ending March 2025. After nearly two decades of intermittent talks, India will open parts of its heavily protected market to its largest trading partner, while negotiations notably excluded sensitive farm and dairy products to safeguard millions of small farmers. Key compromises were reached on contentious issues such as automobiles and steel, with India reportedly planning to cut tariffs on EU car imports sharply.
The deal comes amid a flurry of global trade agreements as countries seek to hedge against uncertainty in U.S. trade policy under President Donald Trump. The EU has recently struck pacts with Mercosur, Indonesia, Mexico and Switzerland, while India has finalised deals with Britain, New Zealand and Oman. India–EU talks gained urgency after both sides agreed last year to fast-track negotiations, following stalled India–U.S. trade discussions and the imposition of steep U.S. tariffs on Indian goods.
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