New Delhi is buzzing with anticipation as India prepares to celebrate its 76th Republic Day on January 26. In a significant diplomatic boost, two top European Union leaders—European Council President Antonio Costa and European Commission President Ursula von der Leyen—will attend as chief guests from January 25 to 28.
Their visit has sparked widespread speculation that a landmark Free Trade Agreement (FTA) between India and the EU could be finalized soon. Von der Leyen has been vocal about her enthusiasm, especially amid global trade disruptions caused by US tariffs and shifting economic landscapes.
Speaking at the World Economic Forum in Davos, she declared, ‘Right after Davos, I’ll head to India. We’re in the final stages of a historic trade agreement—some call it the mother of all deals. This pact will create a market for 2 billion people, representing nearly a quarter of global GDP.’
She emphasized Europe’s strategy to diversify its markets by partnering with dynamic growth centers like India. ‘This gives Europe a first-mover advantage in one of the world’s fastest-growing continents and this century’s economic powerhouse,’ von der Leyen added.
Sources indicate that the India-EU Summit on January 27 could see the successful conclusion of FTA negotiations. Both sides are expected to adopt a document announcing the end of talks, paving the way for ratification by the European Parliament and Council.
Beyond trade, agreements on security and defense partnerships, as well as enhanced mobility for Indian professionals in the EU, are on the table. This would mark India’s largest-ever deal with the 27-nation bloc, a key export destination.
India’s Commerce Minister Piyush Goyal has dubbed it the ‘mother of all agreements.’ In FY2024, bilateral trade hit $135 billion, and the FTA promises greater market access, especially for labor-intensive sectors like textiles, leather, apparel, gems, jewelry, and handicrafts.
While negotiations are advanced, sensitive issues like the EU’s Carbon Border Adjustment Mechanism (CBAM) remain under discussion. India is pushing for zero-duty access to boost its key industries. Goyal recently confirmed talks are in the final phase, signaling a breakthrough is imminent.
This FTA could reshape global trade dynamics, strengthening ties between two economic giants and opening new avenues for growth amid geopolitical uncertainties.