India’s long-stalled free trade agreement with the European Union is now in its final negotiating phase and is being described by Commerce and Industry Minister Piyush Goyal as the most significant trade deal New Delhi has pursued. Goyal characterised the pact as the “mother of all deals”, underlining its scale and potential to reshape bilateral commerce between India and the 27-member bloc. The minister’s comments came as negotiations accelerate ahead of a planned visit by the European Council president and the president of the European Commission to India for the 16th India-EU Summit later this month. Goyal insisted the agreement will be comprehensive and mutually beneficial, encompassing goods, services and investment provisions while balancing the interests of both sides.
Diplomatic engagements in Brussels earlier this month laid groundwork for narrowing differences, with Goyal and the EU’s Commissioner for Trade and Economic Security Maroš Šefčovič directing officials to iron out outstanding issues. Discussions focused on market access, rules of origin and services sectors, signalling a shared determination to conclude the pact.
Officials say the deal could be announced around the summit, where European leaders will be chief guests at India’s Republic Day celebrations. Goyal emphasised that negotiations have addressed sensitive areas such as the carbon border adjustment mechanism and dairy to India’s satisfaction, and that no EU member state has objected to the agreement, pointing to broad support within the bloc.
Trade officials note that an India-EU FTA would mark India’s largest ever trade treaty, eclipsing prior agreements with the United Arab Emirates, Australia, the European Free Trade Association, the UK, Oman, New Zealand and Mauritius. India’s bilateral merchandise trade with the EU was valued at about $136.5 billion in 2024-25, with exports of roughly $75.9 billion and imports of $60.7 billion, making the EU a vital partner.
The pact carries strategic weight for both sides. For India, it would diversify export markets and deepen economic ties with a bloc that represents one of the largest global markets. For the EU, an agreement with India supports efforts to balance trade partnerships and reduce over-dependence on single trading partners amid broader geopolitical shifts. German Chancellor Friedrich Merz has floated the possibility of concluding the agreement by the end of January, reinforcing momentum for a timely announcement.
Business groups have welcomed progress. Manufacturers and exporters in sectors such as textiles and engineering view a comprehensive FTA as a gateway to enhanced market access and regulatory certainty, potentially unlocking investment and growth. However, analysts caution that substantive benefits will hinge on the detailed terms, including tariff schedules and regulatory alignment across complex product and services categories.
Even as optimism builds, negotiators face lingering challenges. The EU’s proposed carbon tax framework has been flagged as a sticking point, reflecting broader differences in environmental policy and industrial competitiveness that both sides must reconcile to finalise the pact. Experts say resolving such issues is critical to ensuring that the agreement delivers tangible benefits across diverse sectors without undermining domestic policy priorities.
Political support from New Delhi and Brussels underscores the pact’s broader significance. Leaders from both sides have framed the agreement as not just an economic milestone but a reinforcement of strategic ties in an era of shifting global trade patterns. For India, securing this deal would advance its long-standing objective of forging deep economic integration with major global partners, while for the EU it would cement a partnership with one of the fastest-growing major economies.