EU on cusp of historic trade deal with India: Ursula von der Leyen

By Admin

21 Jan, 2026

The European Union is on the brink of signing what could become one of the most consequential trade agreements of the decade with India. European Commission President Ursula von der Leyen described the proposed Free Trade Agreement (FTA) as “the mother of all deals,” underlining its scale and strategic importance for both sides.

A deal shaping one-fourth of global GDP

Speaking at a special address at the World Economic Forum Annual Meeting in Davos on Tuesday (January 20, 2026), Ms. von der Leyen said the agreement would create a market of nearly 2 billion people, accounting for about one-fourth of global GDP. She emphasized that the deal would offer Europe a crucial first-mover advantage in one of the world’s fastest-growing and most dynamic regions.

“Right after Davos, I will travel to India. There is still work to do. But we are on the cusp of a historic trade agreement. Some call it the mother of all deals,” she said, adding that Europe wants to do business with the growth centres and economic powerhouses of this century.

High-level visit and summit talks in India

President of the European Council Antonio Costa and Ms. von der Leyen will be in India from January 25 to 27, where they will grace the Republic Day celebrations as chief guests. During the visit, they are scheduled to hold summit-level talks with Prime Minister Narendra Modi.

At the India-EU summit on January 27, the two sides are expected to announce the conclusion of negotiations on the long-awaited Free Trade Agreement, alongside other major strategic initiatives.

Strengthening economic and strategic ties

The European Union is already India’s biggest trade partner, with bilateral trade in goods touching $135 billion in FY 2023-24. The proposed FTA is expected to significantly deepen economic engagement across multiple sectors, especially at a time when global trade is facing disruptions due to Washington’s tariff policies.

Beyond trade, the summit is likely to see the unveiling of a defence framework pact, a Strategic Agenda, and a Joint Comprehensive Strategic Vision for 2026-2030. India and the EU have been strategic partners since 2004, and these initiatives are expected to bring a qualitative shift in their overall bilateral relationship.

A broader global trade push

Ms. von der Leyen also highlighted that the EU is working on new trade agreements with Australia, and is advancing negotiations with the Philippines, Thailand, Malaysia, and the UAE. Reaffirming Europe’s global outlook, she said, “From Latin America to the Indo-Pacific and far beyond, Europe will always choose the world. And the world is ready to choose Europe.”

She further reiterated that Europe would continue to stand with Ukraine until there is a just and lasting peace.

Long road to a landmark agreement

India-EU FTA negotiations were first launched in 2007 but were suspended in 2013 due to differences in ambition. Talks were relaunched in June 2022, and the current momentum reflects shared concerns over global trade uncertainty and the need for resilient, diversified partnerships.

In parallel, the proposed Security and Defence Partnership (SDP) aims to enable deeper cooperation in defence and security, further cementing the strategic dimension of India-EU relations.

If finalized, this ambitious trade deal could redefine economic engagement between India and Europe, setting the tone for a stronger, more integrated partnership in an increasingly complex global trade environment.