- Formal signature takes six months, Indian government official says.
- Says implementation of agreement is expected within a year.
- Trade between the two sides is $136.5 billion in fiscal year 2025.
India and the European Union have concluded talks on a long-awaited trade deal to be announced on Tuesday, the South Asian nation’s trade secretary said on Monday, a deal both sides are hailing as historic as they grapple with strained US ties.
The agreement paves the way for free trade in goods between the bloc of 27 European nations and India, which together make up a quarter of the world’s gross domestic product and a market of 2 billion consumers.
“It will be a balanced, forward-looking agreement for better economic integration with the EU. The agreement will accelerate trade and investment between both sides,” India’s Commerce Minister Rajesh Agrawal said.
Trade between the two sides totaled $136.5 billion in the fiscal year to March 2025.
Barrage of trade agreements
The formal signing would take place after legal vetting expected to last five to six months, an Indian official familiar with the matter said.
“We expect the agreement to be implemented within a year,” the official added.
The deal comes just days after the EU signed a key pact with the South American bloc Mercosur, following deals last year with Indonesia, Mexico and Switzerland.
During the same period, New Delhi finalized agreements with the UK, New Zealand and Oman.
The spate of deals underscores global efforts to hedge against the United States, as President Donald Trump’s bid to take over Greenland and tariff threats against European countries test long-standing alliances between Western nations.
After nearly two decades of on-off negotiations, the deal will see India open its vast and guarded market, the world’s largest, to free trade with the EU, its biggest trading partner.
Fast-track negotiations were agreed last year
India and the EU pushed to close the deal after Prime Minister Narendra Modi and European Commission President Ursula von der Leyen agreed to speed up negotiations last year.
Bilateral talks, relaunched in 2022 after a nine-year hiatus, gained momentum after Trump imposed import tariffs on several trading partners, including a 50% tariff on goods from India.
An India-US trade deal collapsed last year after a breakdown in communication between their two governments.
Both the EU and India had been locked in a last-minute give and take on cars and steel trade, among the latest points of contention.
The EU had sought sharp cuts by India in import duties on its cars that could exceed 100%, while India – a major steel producer – has been pressing the EU to reduce trade restrictions on its steel exports.
Reuters reported on Sunday that India planned to cut tariffs on cars imported from the EU to 40% from as high as 110% as part of the deal.
Negotiations excluded some sensitive agricultural and dairy products as New Delhi maintains the need to protect millions of subsistence farmers.
