PM Modi calls India-EU pact a turning point for global trade
India and the European Union on Tuesday concluded negotiations on a landmark Free Trade Agreement (FTA), with Prime Minister Narendra Modi calling it the largest trade deal in India’s history and a defining moment in India-EU relations.
Announced at the India-EU Business Forum, the agreement comes amid global economic uncertainty and rising geopolitical tensions, sending a strong signal in favour of open, rules-based global trade. PM Modi described the pact as a “turning point” that elevates India-EU ties to a new strategic level.
“This is no ordinary diplomatic visit. It heralds a new era in India-European Union relations,” PM Modi said, noting that for the first time, leaders of the European Union Council and Commission are attending India’s Republic Day celebrations as chief guests.
Calling the FTA a whole-of-society partnership, the Prime Minister said the agreement reflects an unprecedented alignment between the world’s two largest democracies. “With this vision, we have today finalised a comprehensive Free Trade Agreement,” he said.
#WATCH | Delhi: At the India-EU Business Forum, Prime Minister Narendra Modi says, “This visit to India by the Presidents of the European Union Council and Commission is no ordinary diplomatic visit. It heralds a new era in India-European Union relations. For the first time,… pic.twitter.com/8qUNNNNTjx
— ANI (@ANI) January 27, 2026
Big boost for farmers, workers and services
PM Modi said the FTA will significantly expand access for Indian labour-intensive sectors to European markets. Textiles, gems and jewellery, auto components and engineering goods are expected to gain, while agricultural exports such as fruits, vegetables, processed foods and marine products will open new income streams for farmers and fishermen.
The services sector is also set to benefit, particularly IT, education, traditional medicine and business services. “At a time when the global business community is rethinking supply chains, this FTA sends a clear and positive message,” the Prime Minister said.
Trade, investment ties deepen
India-EU trade has doubled over the last decade to reach nearly €180 billion, PM Modi noted. More than 6,000 European companies now operate in India, with EU investments crossing €120 billion, while around 1,500 Indian firms are present across Europe.
Indian investment in the EU has reached nearly €40 billion, with cooperation expanding across research, manufacturing and services.
Cars, wine and spirits to get cheaper
The FTA, which European Commission President Ursula von der Leyen has termed the “mother of all trade deals”, will also reduce duties on several European imports. Luxury cars such as Mercedes, BMW and Audi — which currently face import duties exceeding 100 per cent — will see tariffs cut to 40 per cent initially and eventually to 10 per cent under a quota-based system.
Officials said the calibrated concessions will protect India’s fast-growing auto industry while making premium European vehicles significantly more affordable for Indian consumers.
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