India and the EU have finalised a landmark free trade agreement, which the European Commission president, Ursula von der Leyen, hailed as the “mother of all deals”.
The agreement comes after almost two decades of on-off negotiations between India and the EU, which vastly accelerated in the past six months and were finally concluded late on Monday night.
The deal is expected to open up India’s vast and traditionally tightly guarded market to the 27 nations in the bloc, with a focus on manufacturing and the services sector.
It will ease market access for key European products, including cars and wine, in return for easier exports of textiles, gems and pharmaceuticals.
The agreement is expected to double EU exports to India by 2032 by eliminating or cutting tariffs in 96.6% of traded goods by value, and would lead to savings of €4bn (£3.5bn) in duties for European companies, the EU said.
Tariffs will be reduced to zero for a vast swathe of industrial products, including nearly all iron and steel, plastics, chemicals, machinery and pharmaceuticals.
“Europe and India are making history today,” von der Leyen said after landing in Delhi, where she met the Indian prime minister, Narendra Modi, on Tuesday.
We have created a free trade zone of 2 billion people, with both sides set to benefit.”.
Von der Leyen had previously stated that she expected exports to India to double after the deal, with the EU granted unprecedented access to the previously heavily protected Indian market.
The deal must be ratified by EU member states, the European parliament and the Indian cabinet before it enters into force.
The trade deal is part of a flurry of agreements announced at a summit on Tuesday, as the EU and India grapple with Donald Trump’s tariffs, China’s economic heft and the Russian invasion of Ukraine.
The two sides are due to sign a security pact to deepen joint work on maritime security, hybrid threats and counter-terrorism.
