EU, India Seal ‘Mother of All Deals’ Free Trade Pact as Global Trade Shifts

Femi Ashekun/

The European Union and the Republic of India have concluded a landmark free-trade agreement on Tuesday, described by leaders on both sides as the “mother of all deals.”

The pact follows almost twenty years of negotiations and was formally announced at a summit in New Delhi by European Commission, President Ursula von der Leyen and Indian Prime Minister, Narendra Modi.

The agreement aims to create a liberalised trade framework covering roughly two billion people and nearly a quarter of global gross domestic product, significantly reducing or eliminating tariffs on a wide range of goods and services.

European manufacturers, including carmakers and producers of wine and spirits, stand to benefit from sharply lower duties, while Indian exporters in textiles, leather, jewellery and engineering goods will gain preferential access to EU markets.

Under the deal, tariffs on about 96.6 percent of EU exports to India will be cut or removed, potentially saving European businesses up to €4 billion in annual duties.

India has agreed to phased reductions in levies on European imports such as automobiles — from more than 100 percent initially, to about 10 percent — with implementation spread over several years.

Officials also emphasised strategic cooperation beyond trade, including services market access, regulatory alignment and mobility arrangements for skilled workers.

The agreement still requires ratification by the European Parliament, EU member states and India’s cabinet before taking effect, anticipated in early 2027.

The pact has been interpreted by analysts as part of a broader shift in global trade ties as countries adapt to shifting economic policy patterns.

The EU has been seeking to diversify trade partnerships amid increasing protectionism, particularly from the United States under President Donald Trump’s tariff regime, and rising competition with China.

As of Wednesday, Trump has not yet issued a direct public statement on the EU-India free-trade agreement itself.

Multiple fact-checks confirm that claims circulating online of a direct Trump comment about the so-called “mother of all deals” are not verified.

However, senior US officials have commented on the deal and global trade implications.

US Treasury Secretary, Scott Bessent, expressed disappointment with the EU’s decision to pursue the agreement with India, suggesting it could undermine Western unity and cooperation on issues such as support for Ukraine, and tied it to broader tensions with Washington.

A spokesperson for the US Trade Representative indicated that India appears to gain significant market access in the deal, commenting that “India comes out on top,” and contrasted that with the United States’ ongoing negotiations with India on tariffs.

These remarks reflect administration-level reactions rather than an explicit statement from Trump himself on the pact.

The trade deal’s announcement marks a significant milestone for EU-India relations and could reshape supply chains and market access in Europe and Asia.

Both parties have highlighted potential gains in exports and investment flows, while observers note that broader geopolitical factors, including current US tariff policies, may have accelerated the timing and scope of the agreement.

Ratification and implementation of the deal will be watched closely by global markets and governments, as the pact could influence future trade negotiations involving the United States, China and other major economic powers.