India and the European Union (EU) are aiming to finalize a long-pending Free Trade Agreement (FTA) by the end of 2026, following discussions between Prime Minister Narendra Modi and senior European leaders on the sidelines of the G7 Summit in Canada.
Officials involved in the negotiations described the proposed agreement as the “mother of all trade deals” due to its scale, complexity and economic significance for both sides.
Trade pact discussed during G7 meetings
The push for the agreement gained momentum after Prime Minister Modi held talks with European Commission President Ursula von der Leyen and other European leaders during the G7 Summit.
Both sides reviewed progress in the ongoing negotiations and reiterated their commitment to concluding an ambitious and balanced trade agreement within the agreed timeline.
One of the largest trade agreements under negotiation
The proposed India-EU trade pact is expected to become one of the world’s largest bilateral trade agreements, covering goods, services, investment, digital trade and regulatory cooperation.
Negotiators have been working to resolve differences on market access, tariffs, sustainability commitments, intellectual property rights and mobility of skilled professionals.
Negotiations accelerated in recent months
India and the EU resumed FTA negotiations in 2022 after a gap of several years. Since then, multiple rounds of negotiations have been held, with both sides increasing the pace of discussions in recent months.
Officials have indicated that significant progress has been made across several chapters of the agreement, although some sensitive issues remain under discussion.
Strategic partnership beyond trade
Apart from economic cooperation, India and the EU have been expanding collaboration in areas such as technology, clean energy, connectivity, security, defence and critical supply chains.
Leaders from both sides have emphasized that a successful trade agreement would strengthen the broader strategic partnership amid evolving global economic and geopolitical challenges.
Economic significance for India and Europe
The European Union remains one of India’s largest trading partners. A comprehensive trade agreement is expected to boost bilateral trade, increase investment flows and create new opportunities for businesses and workers on both sides.
Officials said the objective remains to reach a mutually beneficial agreement before the end of 2026reflecting the growing importance of India-EU economic relations.
Key Takeaways
- India and the EU are targeting completion of a Free Trade Agreement by the end of 2026.
- The issue was discussed during meetings on the sidelines of the G7 Summit in Canada.
- Officials have described the proposed pact as the “mother of all trade deals.”
- The agreement is expected to cover trade, investment, services and digital cooperation.
- Both sides have intensified negotiations since talks resumed in 2022.
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