EU 'On the Cusp' of Historic Trade Deal with India, Says Ursula von der Leyen

Historic Trade Pact Nears Completion

Davos, Switzerland – European Commission President Ursula von der Leyen announced on Tuesday, January 21, 2026, that the European Union is 'on the cusp' of signing a historic free trade agreement with India. Speaking at the World Economic Forum (WEF) in Davos, von der Leyen described the potential pact as 'the mother of all deals,' highlighting its immense scale and impact on global trade.

The agreement, which has been years in the making, is anticipated to create a market encompassing two billion people and representing nearly a quarter of global GDP.

Resumption of Negotiations and Upcoming Summit

Negotiations for a comprehensive trade deal between the EU and India first began in 2007 but were stalled in 2013. Talks were officially relaunched in June 2022, gaining renewed political momentum. Significant progress has been made since then, with 20 of the 24 negotiating chapters reportedly closed.

President von der Leyen is scheduled to travel to India next weekend, following the WEF, to advance discussions. She, along with European Council President Antonio Luís Santos da Costa, will be a chief guest at India's Republic Day celebrations on January 26. The formal announcement or signing of the deal is widely expected around the India-EU Summit on January 27, 2026.

Key Areas of Negotiation and Mutual Benefits

The proposed Free Trade Agreement (FTA) aims to remove barriers and enhance economic cooperation. The EU is India's largest trading partner, with bilateral trade in goods reaching $135 billion in the fiscal year 2023-24. India is the EU's 9th largest trading partner.

Key negotiation points include:

• EU's objectives: Lowering India's tariffs on products such as cars, wine, and spirits, which can exceed 100% in some cases. The EU also seeks greater access to India's financial, legal, and banking sectors, alongside commitments on data protection.
• India's objectives: Securing improved market access and lower tariffs for its labor-intensive exports, including pharmaceuticals, textiles, apparel, footwear, gems, and jewelry. India also aims for easier access to the EU for its skilled professionals and a resolution regarding the EU's Carbon Border Adjustment Mechanism (CBAM), which applies to steel, aluminum, and cement.

Both sides are navigating complex issues, with India willing to eliminate tariffs on nearly 90% of imports, while seeking to keep agriculture and dairy out of scope.

Geopolitical Context and Future Outlook

The renewed urgency to finalize this deal comes amidst shifting global trade dynamics, including recent tariff threats from the United States on both the EU and India. Furthermore, the agreement is seen as a strategic move for the EU to diversify its supply chains and reduce reliance on China, while India seeks to strengthen its export competitiveness and manufacturing sector. India's Commerce Minister Piyush Goyal has also echoed the sentiment, calling it 'the mother of all deals' and emphasizing its potential for significant growth.