A free trade agreement has been signed between India and the European Union (EU). Prime Minister Narendra Modi announced this agreement, which is being called ‘Mother of All Deals’. PM Modi said that this agreement is a symbol of a strong partnership between the two biggest economies of the world and it will directly benefit India’s industry, energy sector and the common people. PM Modi said that this deal will strengthen India’s manufacturing capacity and will provide new support to the service sector.
Addressing the India Energy Week 2026, PM Modi said that the India-EU FTA will also support the trade agreement signed last year between India and Britain. This will further strengthen India’s overall trade with Europe. The purpose of this agreement is to increase two-way trade between India and EU and to take economic relations to new heights. The government believes that this will open new avenues of investment, employment and technical cooperation.
This agreement between India and EU was pending for 18 years, which has now been completed. This ‘Agreement in Principle’ has become one of the biggest market openings in India. European Commission President Ursula von der Leyen and European Council President Antonio Costa attended the Republic Day on 26 January 2026 as chief guests. During this period, high-level meetings took place and the atmosphere became very positive.
The important new agreement between India and the European Union has brought huge opportunities for 140 crore Indians and European citizens, which is an example of better coordination between two big economies. This agreement covers about 25 percent of global gross domestic product (GDP) and one-third of global trade.
However, some Indian industries (which were protected by high tariffs) are worried about increased competition. Therefore, there may be a demand for transition period and safeguards. This deal is not just a trade deal but also the beginning of a deep economic relationship between India and Europe. The supply chain in the world is changing and this India-EU agreement will strengthen both.
