'Mother Of All Deals' : India–EU Conclude Historic FTA, Sign Key Pacts

New Delhi: India and the European Union on Tuesday formally finalized the much-awaited Free Trade Agreement (FTA), adding a new chapter to their relations. The agreement was announced after the completion of delegation-level talks between Prime Minister Narendra Modi, European Commission President Ursula von der Leyen, and European Council President Antonio Costa during the 16th India-EU Summit. Both sides are calling this agreement “Mother of All Deals.”

Why did Europe, including Germany, welcome the decision?

Germany welcomed this agreement and said that it will open new development opportunities for both India and Europe. European leaders called it a historic step in global trade.

European Commission President Ursula von der Leyen wrote on social media, "Today Europe and India have made history. We have created a free trade zone of two billion people. This will benefit both sides. This is just the beginning."

Addressing the joint press meet with European Council President António Costa and European Commission President Ursula von der Leyen.@eucopresident @vonderleyen @EUCouncil @EU_Commission https://t.co/0hh4YX8DHe

— Narendra Modi (@narendramodi) January 27, 2026

Which agreements were signed?

India and the EU signed two major agreements during the summit:

• Free Trade Agreement (FTA)
• Security and Defense Strategic Partnership

Apart from this, Defense Minister Rajnath Singh met EU foreign policy chief Kaja Kalas to discuss enhancing cooperation on supply chain, military technology and future defense capabilities.

#WATCH | Delhi | PM Narendra Modi, the President of the European Commission, Ursula Von Der Leyen and the President of the European Council, António Luís Santos da Costa, witness the signing and exchange of the political declaration of the conclusion of negotiations of the… pic.twitter.com/SfT1SDjLTJ

— ANI (@ANI) January 27, 2026

What will be the impact on common people?

Under this agreement many European products can become cheaper in India, including:

• Beer and Spirits (Tax on liquor reduced from 150% to 40%)
• european cars
• Processed foods, olive oil, juices and other food products

At the same time, India's textile, chemical, gems and jewellery, leather, and auto and electrical goods are expected to get better access to the European market. According to the EU, tariffs on 96.6% of European exports would be eliminated or significantly reduced, saving European companies around €4 billion each year and doubling trade by 2032.

Will climate and energy cooperation also increase?

The EU has also announced a plan to provide climate assistance worth 500 million euros to India in the next two years so that green energy and carbon emission reduction projects can be accelerated.

Why is this agreement being considered historical?

This deal has been completed after almost 19 years of negotiations. The talks that started in 2007 were intensified again in 2022. Now this agreement covers about 25% of world GDP and about one-third of global trade.

What will happen next?

According to officials, the process of implementing the agreement will start soon. Its terms and conditions will be implemented in a phased manner over the next few months.

Experts believe that this agreement will strengthen India-EU relations not only in trade but also at the level of strategic and security partnership.