'Mother of all deals'; India and European Union sign historic Free Trade Agreement

NEW DELHI: India and the European Union signed a long-awaited free trade agreement (FTA). The trade deal has the potential to become one of the most significant deals in diplomacy and commerce. India and the European Union aim to strengthen strategic cooperation in the field of defence. Prime Minister Narendra Modi said that the agreement, dubbed the ‘Mother of All Deals’, will bring huge benefits to the oil and gas sector.

India and the European Union have been strategic partners since 2004. It was a relationship rooted in democratic values, multilateralism and a commitment to a rules-based international order. Economically, the two sides are already deeply intertwined. The EU is India's largest trading partner in goods. Bilateral trade reached around US$ 136 billion in 2024-25.

The European Union consists of 27 countries. The Prime Minister said that the new agreement will strengthen the garment, gemstone, jewelry and leather products sectors. There will be a huge reduction in taxes in these sectors. Import duties on foreign cars will be reduced. This agreement represents one-third of global trade. Therefore, it is also described as the world's largest trade agreement. The signing of this agreement comes at a time when US has been involved in diplomatic pugilism, imposing sanctions on India.