The European Union and India have agreed on a trade deal, European Commission President Ursula von der Leyen has said.
"Europe and India are making history today. We have concluded the mother of all deals. We have created a free trade zone of two billion people, with both sides set to benefit", Ms von der Leyen said on X.
After nearly two decades of on-off negotiations, the deal will pave the way for India to open up its vast and guarded market to free trade with the 27-nation EU, its biggest trading partner.
"Yesterday, a big agreement was signed between the European Union and India," India's Prime Minister Narenda Modi said.
"People around the world are calling this the mother of all deals. This agreement will bring major opportunities for the 1.4 billion people of India and the millions of people in Europe," he said.
Trade between India and the EU stood at $136.5 billion in the fiscal year through March 2025.
Europe and India are making history today.
— Ursula von der Leyen (@vonderleyen) January 27, 2026
We have concluded the mother of all deals.
We have created a free trade zone of two billion people, with both sides set to benefit.
This is only the beginning.
We will grow our strategic relationship to be even stronger. pic.twitter.com/C7L1kQQEtr
The formal signing of the India-EU deal would take place after legal vetting expected to last five to six months, an Indian government official aware of the matter has said.
"We expect the deal to be implemented within a year," the official added.
The agreement comes days after the EU signed a pivotal pact with the South American bloc Mercosur, following deals last year with Indonesia, Mexico and Switzerland.
During the same period, India finalised pacts with Britain, New Zealand and Oman.
The spate of deals underscores global efforts to hedge against trade with the United States as President Donald Trump's bid to take over Greenland and tariff threats on European nations test longstanding alliances among Western nations.
An India-US trade deal collapsed last year after a breakdown in communications between their two governments.
Talks between India and the EU were relaunched in 2022 after a nine-year lull, and gathered momentum after Mr Trump put tariffs on several trading partners, including a 50% tariff on goods from India.
For India, the tariff cuts with the EU will lead to more exports in labour intensive sectors that will help partly offset the impact of US tariffs, said Ajay Srivastava, a former Indian trade official.
He said the deal will also give an immediate price advantage for EU products in India because of some relief from its high tariffs, for instance up to 110% on cars.
The Irish Whiskey Association, the representative body for the Irish whiskey sector, has welcomed the conclusion of talks on the EU-India free trade agreement.
The director of the association, Eoin Ó Catháin, said the trade deal will greatly ease trade with the biggest whiskey market in the world, adding that it will facilitate market diversification at a pivotal time for the sector.
India is among the fastest growing markets for Irish whiskey. According to the latest IWSR data, Irish whiskey sales in India surpassed 700,000 cases in 2024, a 57.5% growth year-on-year, and an incredible 900% increase since 2020.
Remarkably, all this was achieved while exporters faced a prohibitive 150% tariff, Mr Ó Catháin noted.
