'Mother of all deals': European Union, India on cusp of historic deal worth a quarter of global GDP

Davos: European Union (EU) President Ursula von der Leyen has said that the free trade agreement (FTA) between India and the European Union has now reached its decisive stage. Speaking at the World Economic Forum (WEF) in Davos, she said that both sides are "very close to a historic trade agreement," which some are calling the "mother of all deals." 

What did European Union chief Ursula von der Leyen say?

In her address, von der Leyen said that Europe wants to promote fair trade instead of tariffs, partnership instead of isolation, and sustainable development instead of exploitation. She mentioned that she would be visiting India immediately after Davos, although some issues still need to be worked out.

Why is this agreement special?

"We are on the verge of a historic trade agreement. Some call it the 'mother of all deals'," she said. 

According to the EU chief, this agreement will create a common market of nearly two billion people and cover approximately 25% of the world's GDP. This will give European companies a significant first-mover advantage in a rapidly growing market like India.

Von der Leyen described India as a crucial part of Europe's new economic strategy. She said that the Indo-Pacific region is the economic center of this century and Europe wants to strengthen its relations with countries like India. She said that the EU particularly wants to strengthen supply chains with India in areas such as clean technology, digital infrastructure, pharmaceuticals, and critical minerals.

What is the schedule for the EU president’s upcoming India visit?

The EU chief's statements come at a time when she is scheduled to visit India between January 25 and 27, 2026. According to the Indian Ministry of External Affairs, European Council President António Costa and EU President Ursula von der Leyen will visit India at the invitation of Prime Minister Narendra Modi. Both leaders will be the chief guests at India's 77th Republic Day celebrations, reflecting the growing importance of India-EU relations.

The 16th India-EU Summit will be held in New Delhi on January 27, co-chaired by Prime Minister Modi. High-level meetings will be held between the two sides, and an India-EU Business Forum will also be organized. If this trade agreement is finalized, it will be one of the world's largest and most ambitious agreements. It will include not only tariffs but also issues such as services, investment, digital trade, environmental standards, and regulatory cooperation.

India will gain better access to a large market like Europe, while Europe will gain a stronger foothold in a rapidly growing country like India. Although some complex issues remain, the signals from Davos suggest that India and the European Union are very close to finalizing this historic agreement. The meetings to be held in New Delhi in the coming days could prove to be a major step in this direction.