European Commission President Ursula von der Leyen announced on Tuesday that the European Union is on the verge of signing a landmark trade deal with India, described as “the mother of all deals.” Speaking at the World Economic Forum Annual Meeting in Davos, she said the agreement will create a market of two billion people, representing nearly a quarter of global GDP, and give Europe a first-mover advantage with one of the world’s fastest-growing regions.
“Right after Davos, I will travel to India. There is still work to do, but we are close to a historic trade agreement,” von der Leyen said. “Europe wants to engage with the growth centres of today and the economic powerhouses of this century.” She added that Europe is committed to global partnerships, from Latin America to the Indo-Pacific.
Von der Leyen, along with European Council President Antonio Costa, will visit India from January 25 to 27 to attend Republic Day celebrations as chief guests and hold summit talks with Prime Minister Narendra Modi. During the India-EU summit on January 27, the two sides are expected to announce the conclusion of negotiations on the long-awaited Free Trade Agreement (FTA).
The EU is also pursuing new trade agreements with Australia, the Philippines, Thailand, Malaysia, and the UAE, von der Leyen said. She reaffirmed Europe’s support for Ukraine until a just and lasting peace is achieved.
India is the EU’s largest trade partner, with bilateral trade in goods reaching $135 billion in 2023-24. The proposed FTA is expected to deepen trade ties and strengthen cooperation across multiple sectors, particularly at a time when global trade faces disruptions due to Washington’s tariff policies.
In addition to the FTA, India and the EU are likely to unveil a Defence and Security Partnership (SDP) and a strategic agenda at the summit, covering the period 2026–2030. The SDP aims to enhance interoperability in defence, allowing Indian firms to participate in the EU’s SAFE (Security Action for Europe) programme, a €150 billion instrument supporting member states’ defence readiness. Negotiations for a Security of Information Agreement (SOIA) are also expected to begin, boosting industrial defence cooperation.
India and the EU have been strategic partners since 2004. FTA negotiations began in 2007 but were suspended in 2013 due to differences in ambition, before being relaunched in June 2022. The forthcoming agreement is seen as a milestone that could redefine trade and strategic cooperation between the two sides.
