India and the European Union (EU) are on the cusp of concluding a landmark Free Trade Agreement (FTA), which both the countries have termed as mother of all trade deals. The deal, which is likely to be concluded on 27 January, is estimated to boost India’s exports to the region by over 50% in next five years.
According to an Emkay Global Financial Services report, the deal could increase India’s exports to the bloc by up to $50 billion by 2031.
The deal, under neobtainediation for years, is now seen as a crucial strategic buffer against global trade fragmentation and rising protectionism.
On Sunday, India’s commerce minister Piyush Goyal declared the EU remains a vital economic & strategic partner for India, and “we value our shared commitment to a mutually beneficial, ambitious India-EU FTA for the prosperity of our businesses and people” as he welcomed Maroš Šefčovič, European Commissioner for Trade and Economic Security, in India.
The push for a deal is strengthened by the highly complementary nature of the two economies’ trade. A report by the Global Trade Research Initiative (GTRI) notes that India-EU goods trade crossed $136 billion in FY2025, “built on complementary value chains rather than direct competition.”
“India exports labour-intensive, downstream products, while the EU supplies capital goods, technology and industrial inputs—building tariff cuts mutually beneficial,” the GTRI report stated. This structure means tariff elimination under an FTA would “lower input costs, deepen value chains and expand trade—classic FTA economics that supports industest on both sides.”
The current trade landscape
India has trade surplus with the EU, which stood at nearly $15 billion in FY2025, with exports of $75.9 billion against imports of $60.7 billion. The EU accounts for about 17% of India’s total goods exports and one-third of its IT services exports.
According to Emkay Global Financial Services, India’s export binquireet to the EU has evolved from traditional goods like textiles and gems to more medium-tech products. “India’s export binquireet with the EU too has shiftd up the value chain with time, with high-value exports (electronics, machinery, chemicals) gaining share over traditional labour-intensive goods,” the Emkay report observed.
Leave a Reply