India-EU FTA: India and European Union Sign Historic ‘Grand Deal’; PM Narendra Modi Calls It ‘Mother of All Agreements’

A historic “grand deal” was signed between India and the European Union on Tuesday, January 27, marking a major milestone in bilateral ties. Alongside the conclusion of negotiations on a long-awaited Free Trade Agreement (FTA), India and the EU also signed a security and defence cooperation agreement. Prime Minister Narendra Modi described the development as the “mother of all deals”.

The 16th India-EU Summit was attended by PM Narendra Modi, European Commission President Ursula von der Leyen and European Council President Antonio Costa.

#WATCH | Delhi | President of the European Commission, Ursula Von Der Leyen says, "We are not only making our economies stronger. We are also delivering security for our people in an increasingly insecure world. Today, the world's two largest economies and democracies launched… pic.twitter.com/kIdntlcheg

— ANI (@ANI) January 27, 2026

Calling it India’s largest free trade agreement to date, PM Modi said the deal would significantly improve access to European markets for Indian farmers, small businesses and entrepreneurs. He noted the coincidence of the agreement being signed on January 27, a day after the EU leadership attended India’s Republic Day celebrations as chief guests.

Modi said shared democratic values, economic integration and strong people-to-people ties were taking India-EU relations to new heights. He added that bilateral trade currently stands at USD 118 billion.

#WATCH | Delhi | President of the European Commission, Ursula Von Der Leyen says, "We both know our greatest wealth are our people. That is why I'm so glad we are signing a mobility agreement. We will facilitate the movement of students, researchers, seasonal and highly skilled… pic.twitter.com/VZembCVGb8

— ANI (@ANI) January 27, 2026

"We both know our greatest wealth are our people. That is why I'm so glad we are signing a mobility agreement. We will facilitate the movement of students, researchers, seasonal and highly skilled workers. This is also why we are launching the first  EU legal gateway office in India. It will be a one-stop hub to support Indian talent moving to Europe in full alignment with EU member states' policies. This is good for our economies. This is good for the friendship between our people and this openness benefits us all," President of the European Commission, Ursula Von Der Leyen said.

Key Trade and Tariff Concessions

Export savings: EU exporters are expected to save nearly €4 billion annually in tariffs.

Alcohol and beverages: Tariff on beer reduced to 50%; wine tariffs cut by 40%.

Automobiles: Duties on cars and commercial vehicles slashed from 110% to 10%, with an annual quota of 250,000 vehicles.

Food products: Duties on olive oil, margarine and vegetable oils abolished; tariffs on fruit juices and processed foods eliminated.

Also Read | Budget 2026 should announce tax relief on bank deposits, insurance and pension reforms: SBI.

Relief for Industrial and Medical Sectors

Chemicals and machinery: Tariffs of up to 44% on machinery and up to 22% on chemicals largely removed.

Medicines: Duties of up to 11% on medicines and medical devices have been mostly abolished.

Aviation: Tariffs on aircraft and spacecraft reduced to zero.

Also Read | "Two giants India and EU sign a win-win deal": EU Commission President Ursula von der Leyen.

Other Major Highlights

Wider access: Tariffs on over 90% of EU goods exported to India will be eliminated or reduced.

Environmental support: The EU will provide €500 million over two years to help India reduce greenhouse gas emissions.

Intellectual property: Stronger protection for EU trademarks, designs, copyrights and trade secrets.

Jobs and industry: The agreement is expected to boost trade, generate employment and strengthen small and medium enterprises.