India and the European Union stand on the cusp of a historic free-trade agreement, with talks set to conclude at the 16th India-EU Summit on 27 January 2026.

Prime Minister Narendra Modi is hosting European Commission President Ursula von der Leyen and European Council President Antonio Costa in New Delhi, following their roles as chief guests at India's 77th Republic Day parade on 26 January. 

This pact, nearly two decades in the making since negotiations began in 2007 and were revived in 2022, promises to reshape one of the world's largest economic partnerships, creating a market of nearly two billion people that accounts for almost a quarter of global GDP.

Commerce Secretary Rajesh Agrawal confirmed that official-level negotiations have wrapped up, with a formal announcement expected today. The deal, often dubbed the "mother of all deals," will reduce tariffs on key EU exports like cars and wine while aiding Indian sectors such as textiles and jewellery. 

Legal scrubbing of the text is underway, paving the way for signing later this year and potential entry into force in early 2027.

The summit's agenda extends far beyond trade, encompassing defence and security cooperation, climate action, critical technologies, and a commitment to a rules-based global order. This broader strategic push comes amid uncertainties from US President Donald Trump's trade and foreign policies, prompting Europe to diversify away from over-reliance on the US and China. India, positioning itself as a vital economic and strategic partner, sees the pact as a boost to its exports and indigenous manufacturing ambitions.

Von der Leyen hailed the agreement last week as a "historic trade agreement," emphasising its stabilising potential. During Republic Day, she posted on X: "A successful India makes the world more stable, prosperous and secure, and we all benefit," later adding, "Long live the friendship between Europe and India." Antonio Costa arrived in New Delhi on 25 January, underscoring the EU's intent to deepen collaboration across policy areas.

External Affairs Minister S Jaishankar met EU delegates ahead of the summit, building momentum after the Republic Day showcase of India's military prowess, including mock-ups from Operation Sindoor. 

The parade highlighted cultural diversity, development strides, and newly raised units, setting a symbolic tone for enhanced ties. Analysts view the FTA as a decisive shift, enhancing India's strategic autonomy while helping the EU secure supply chains for critical minerals and technologies.

If signed, the agreement could double bilateral trade, currently valued at over €120 billion annually, by slashing duties on 90 per cent of goods. Sensitive sectors like agriculture and dairy faced hurdles but appear resolved through compromises.

A parallel mobility framework and strategic defence pact are also nearing finalisation, covering joint military exercises, technology transfers, and counter-terrorism.

The timing aligns with India's "Make in India" drive and the EU's push for de-risking from China. Expectations include eased visa norms for professionals and investments in green hydrogen and semiconductors. As talks unfold today, stakeholders anticipate a joint statement outlining implementation timelines.

This summit caps years of diplomatic efforts, suspended in 2013 over ambition gaps but revived amid post-Ukraine war realignments. For India, it counters regional FTAs like those with the UK and Australia, while for the EU, it counters-balance US protectionism. Live updates from New Delhi indicate high optimism as leaders prepare joint press remarks.

Based On News18 Report