India and the European Union (EU) have announced a landmark Free Trade Agreement (FTA) on January 27, 2026, bringing to an end nearly two decades of negotiations between the two sides. The deal, described by EU leaders as the “mother of all deals,” is expected to significantly deepen economic ties and reshape global trade dynamics.The agreement aims to drastically reduce or eliminate tariffs on the vast majority of goods traded between India and the EU’s 27 member states, covering sectors such as textiles, machinery, chemicals, automobiles, wine and pharmaceuticals. It is anticipated to cut up to €4 billion in tariffs annually and expand market access for exporters on both sides.
Under the pact, India will gradually lower high duties on European products — including cars and wines — while the EU will provide near-total preferential access to Indian exports such as textiles, marine products and gems and jewellery. Some sensitive items, like dairy and certain agricultural goods, have been excluded to protect domestic industries.