India and the European Union have announced a long-awaited bilateral trade agreement, described by leaders as the “mother of all deals” because it covers nearly 25% of global GDP and around one-third of world trade.
Under the agreement, the EU will grant duty-free access to 99.5% of goods exported from India, while India will offer duty-free access to 97% of EU imports. The announcement was made in Delhi by Narendra Modi, António Costa and Ursula von der Leyen. EU leaders also attended India’s Republic Day celebrations for the first time.
The deal lands at a sensitive moment globally, with EU–US trade relations under strain and fresh tariff threats emerging elsewhere. Alongside the trade pact, India and the EU also signed agreements on defence and security cooperation, signalling a deeper strategic partnership.
Von der Leyen said the agreement marks the start of a new chapter, creating a free trade zone of nearly 2 billion people. She described it as a historic step that will continue to evolve and strengthen ties between Europe and India.
What this means for prices
Once implemented, the agreement is expected to significantly reduce prices on many European products in India:
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European cars and appliances could become much cheaper
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Duties on processed foods such as pasta and chocolate may be eliminated
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Wine tariffs could fall gradually from 150% to 20%
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Car tariffs could drop from 110% to 10% over time
Supporters say the deal will boost trade, investment and consumer choice on both sides, while critics are watching closely to see how sensitive sectors are protected as the agreement moves toward full implementation.