India, EU near ‘historic’ trade deal as leaders prepare for summit in New Delhi
New Delhi, January 20. India and the European Union are close to finalising what European Commission President Ursula von der Leyen has described as a “historic trade agreement”, one that could create a combined market of nearly two billion people and account for almost a quarter of global GDP.
Von der Leyen and European Council President Antonio Costa will visit India from January 25 to 27 to attend the Republic Day celebrations as chief guests and hold summit-level talks with Prime Minister Narendra Modi. The two sides are expected to announce the conclusion of negotiations on the long-pending free trade agreement (FTA) at the India–EU summit on January 27.
Speaking at the World Economic Forum in Davos, von der Leyen said Europe was keen to strengthen economic ties with fast-growing regions, news agency PTI reported. She noted that while some work remained, the agreement was within reach and could give Europe an early advantage in engaging with one of the world’s most dynamic growth centres.
“Europe wants to do business with the economic powerhouses of this century,” she said, underlining the bloc’s intent to deepen engagement across regions from the Indo-Pacific to Latin America.
The European Union is currently India’s largest trading partner, with bilateral trade in goods reaching $135 billion in 2023-24. The proposed FTA is expected to significantly expand trade and investment flows, while also bringing qualitative changes to the broader bilateral relationship at a time of global trade uncertainty triggered by shifting tariff policies in the US.
Beyond trade, the summit is likely to see the unveiling of a defence framework pact and a new strategic agenda to guide ties from 2026 to 2030. India and the EU, strategic partners since 2004, are also expected to announce a Security and Defence Partnership aimed at enhancing cooperation, improving interoperability, and enabling Indian companies to participate in the EU’s SAFE programme, a 150 billion-euro initiative to boost defence readiness.
In addition, both sides are set to launch negotiations on a Security of Information Agreement, which is expected to facilitate closer industrial and defence collaboration. The FTA negotiations, first launched in 2007 and stalled in 2013 due to differences over ambition, were revived in June 2022 and are now nearing fruition amid renewed geopolitical and economic convergence between India and the EU.
