Republic Day 2026: Ursula von der Leyen and Antonio Costa will be chief guests on Republic Day.

New Delhi. India has made a big diplomatic move for the Republic Day of 2026. European Commission President Ursula von der Leyen and European Council President Antonio Costa will be the chief guests on January 26. This is not just a ceremony, but the larger objective behind it is to finalize the Free Trade Agreement (FTA) between India and the European Union (EU). Both sides can seal this historic deal in the India-EU Summit to be held on January 27. Piyush Goyal and EU officials are working day and night to conclude this agreement which has been pending for decades.

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After all, why has India invited only two EU stalwarts on Republic Day?

Calling the top leadership of EU on Republic Day is part of a well-thought-out strategy of India. This step makes clear New Delhi’s intention that it wants to take its diplomatic and economic relations with Europe to a new level.

Relations between the two sides have gained momentum since the visit of EU Commissioners to India in February 2025. Now the coming together of two big faces of EU to India will give a big message to the world. This visit can prove to be a ‘game changer’ to increase trade, defence, technology and people-to-people exchange.

How will the Free Trade Agreement (FTA) train, which has been stuck for years, come back on track?

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The period of negotiations on Free Trade Agreement (FTA) between India and the European Union has dragged on for a long time, but now it seems that the matter is about to be resolved. Talks resumed in New Delhi on 8 December.

According to a report by Bussiness, both the parties want to finalize the deal by the end of this year or before the January summit. Commerce Minister Piyush Goyal is leading the Indian delegation. Trade Director General Sabine Weyand is leading the charge on behalf of the EU. She has come to Delhi for the second time within a month, which shows how serious the EU is about this deal.

What are India’s concerns on EU carbon tax and steel exports?

Even though the talks are in the final stages, some issues are still pending. The biggest issue is the European Union’s Carbon Border Adjustment Mechanism (CBAM). This is coming into effect from January 1. India has expressed strong objection to this. If this is implemented then steel going from India to Europe. Aluminum and other carbon-intensive goods may face heavy taxes. Apart from this, EU is seeking market access for its cars and steel in India. At the same time, India wants relaxation in Europe for its service sector. Now it has to be seen whether a consensus can be reached on these issues before the parade on 26 January.

What is CBAM?

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CBAM i.e. ‘Carbon Border Adjustment Mechanism’ is a new rule of the European Union. Under this, the goods (like iron, steel) which produce more carbon are released. There will be extra tax on them in Europe. India is opposing this because it will make Indian goods costlier in Europe and will affect exports.