India and the European Union are set to unveil what has been described as the “mother of all deals” on Tuesday after successfully concluding lengthy negotiations. Together, India and the EU account for nearly one-fifth of global trade and around a quarter of the world’s population, underscoring the growing economic and strategic importance of the partnership.
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India and the EU maintain a close partnership aimed at promoting economic growth, upholding the rules-based international order and promoting sustainable development, with trade and investment at the core of their relationship.
Here is what the President of the European Council had to say
In an exclusive interview with Hindustan Times, European Council President António Costa said it was essential for the EU and India to become closer partners.
“In our multipolar world, it is essential that the EU and India become closer and closer partners because together we can be strong providers of stability, protection and reliability in international relations and protect our international rules-based order,” Costa added.
I think our trade agreement is a very important geopolitical stabilizer and an example of how rules-based international trade can be protected, Costa told Hindustan Times.
Apart from pushing for a free trade agreement (FTA), the two sides are expected to develop a defense framework pact and announce a strategic agenda, ANI reported.
Negotiations for a free trade agreement were originally launched in 2007, but were suspended in 2013 due to differing ambitions, before resuming in June 2022.
India and the EU are also exploring the possibility of concluding a Security of Information Agreement (SOIA) and a Mobility Pact. Agreements are expected in other sectors, and discussions are also expected to cover the Russian-Ukrainian conflict and developments in West Asia.
“It is the most important trade agreement the EU has ever signed. It is a very important tool to stabilize trade relations around the world,” Costa told Hindustan Times.
It comes at a very important time and sends a very important political message to the world that India and the EU believe more in trade deals than tariffs, Costa told Hindustan Times.
India-EU relations
India and the European Union are set to deepen their strategic ties – first established in 2004 – by signing a Security and Defense Partnership (SDP) that will explore ways India can engage with European defense initiatives.
At the 16th India-EU summit today, Prime Minister Narendra Modi is scheduled to hold limited-access and delegation-level talks with European Commission President Ursula von der Leyen and European Council President Antonio Costa.
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The India-EU Business Forum will also be held on the sidelines of the summit.
Discussions are expected to focus on trade, defense and security cooperation, climate action, critical technologies and strengthening the rules-based global order.
In merchandise trade, the EU is India’s second largest trading partner, after China and ahead of the United States, accounting for 11.5 percent of India’s total merchandise trade.
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According to official figures, trade in goods between the EU and India was valued at more than €120 billion in 2024. This included EU imports from India worth €71.4 billion and EU exports to India worth €48.8 billion.
It comes at a very important time and sends a very important political message to the world that India and the EU believe more in trade deals than tariffs.
Bilateral trade in goods has doubled over the past decade. During this period, EU imports from India increased by 140 percent, while EU exports to India increased by 58 percent, showing the continued expansion of trade ties.
Major goods exported by the EU to India include machinery and equipment, transport equipment and chemicals. On the other hand, the EU mainly imports machinery and equipment, chemicals and fuels from India.
Our trade agreement is a very important geopolitical stabilizer and an example of how rules-based international trade can be protected.
Key exports of Indian services to the EU were other business services, telecommunications and IT, and transport services. Imports included intellectual property, telecommunications and IT services.
(With inputs from ANI, HT)
Key things
- The India-EU FTA represents a significant milestone in international trade relations and potentially stabilizes global markets.
- Bilateral trade between India and the EU has doubled over the past decade, underscoring the growing economic interdependence.
- The agreement underscores a mutual commitment to promote a rules-based international order amid geopolitical tensions.
