Trade deal: India and EU to announce FTA amid Trump tariff tensions

The deal will expand market access for Indian exports to Europe while easing entry for European investments and goods, such as cars and beverages, into Asias third-largest economy.

This is a perfect example of a partnership between two major economies of the world... This agreement represents 25% of the global GDP and one-third of global trade, Modi said while inaugurating the India Energy Week conference on Tuesday.

The EU is Indias largest trading partner in goods, with bilateral merchandise trade reaching $136bn (£99.4bn) in 2024-25, nearly doubling over a decade.

Talks for a deal between India and the EU started in 2007 but stalled in 2013 over roadblocks in market access and regulatory demands. Discussions were formally restarted in July 2022.

The main sticking points were access to Indias automobile market, agriculture goods and carbon-linked tariffs - and analysts will be reading the fine print to see what the final agreement says on these issues.

Officials from both sides worked hard over the past few days to finalise outstanding chapters of the agreement, aiming to wrap it up before the EU leaders visit.

The agreement - von der Leyen and Indias commerce minister Piyush Goyal have described it as the mother of all trade deals - comes as pressure grows on Delhi and Brussels to secure alternative markets for exporters.

In the past seven months, India signed major trade agreements with the UK, Oman and New Zealand, and a 2024 pact signed with the four-nation European Free Trade Association bloc of Switzerland, Norway, Iceland and Liechtenstein has come into effect.

The EU, meanwhile, signed a trade deal with South Asian trade bloc Mercosur earlier this month after 25 years of negotiation.