Davos, Jan 22 : India and the European union are on the cusp of what’s being called the “mother of all deals”, a historic trade agreement that would create a massive market of 2 billion people, European Commission President Ursula von der Leyen said on Wednesday
Speaking at the World Economic Forum, von der Leyen emphasised that the new deal will involve almost a quarter of the global GDP, putting both India and the EU as prominent players of the 21st century.
“I will travel to India. There is still work to do. But we are on the cusp of a historic trade agreement. Some call it the mother of all deals. One that would create a market of 2 billion people, accounting for almost a quarter of global GDP,” she said.
“And, crucially, that would provide a first-mover advantage for Europe with one of the world’s fastest growing and most dynamic continents,” she added.She described the deal as a pivotal moment for both regions.
The agreement will be finalised during upcoming visits to India by European Council President Ant?nio Costa and European Commission President Ursula von der Leyen, scheduled for the Republic Day Parade 2026. Their presence highlights India’s growing global partnerships and diplomatic engagement with Europe.
Concerned over the tariffs imposed by the US, Europe is looking to diversify its global partnerships, and this agreement has the potential to provide a whole new set of opportunities for businesses in both regions. It’s a game-changer that could reshape the economic landscape for years to come.
Von der Leyen elaborated on the benefits of the deal, stressing that it would “provide a first-mover advantage for Europe with one of the world’s fastest-growing and most dynamic continents.”
She added, “Europe wants to do business with the growth centres of today and the economic powerhouses of this century.” She continued, “From Latin America to the Indo-Pacific and far beyond, Europe will always choose the world. And the world is ready to choose Europe.”
The European union is already India’s largest trading partner, with bilateral trade in goods reaching ?120 billion in 2024, representing 11.5 pc of India’s total trade. India remains the EU’s 9th largest trading partner, accounting for just 2.4 pc of the EU’s trade in goods in 2024.
Nevertheless, trade between the EU and India has surged in recent years, increasing by nearly 90 pc over the past decade.
The FTA, which aims to significantly boost trade, follows years of stalled talks. Initial negotiations for the deal began in 2007 but were put on hold in 2013 due to differences in ambition. After nearly a decade-long pause, negotiations were restarted in June 2022, reflecting both sides’ renewed commitment to enhancing their economic relationship.
The timing of the EU-India FTA is crucial, as it comes amid concerns over trade and tariff policies under US President Donald Trump, which have affected global trade.
As European Commission President Ursula von der Leyen pointed out, “The world may be very different today, without any question. But I believe the lesson is very much the same. That geopolitical shocks can-and must- serve as an opportunity for Europe.”
In addition to the Free Trade Agreement, India and the EU are expected to announce a defence framework pact and a strategic agenda during the upcoming summit from January 25-27.
It must be noted that Commerce Minister Piyush Goyal said on January 16 that the Free Trade Agreement (FTA) with the European union (EU) will be the ‘mother of all deals’ when compared to the seven deals India has signed with ‘developed’ countries.
Since 2014, India has signed trade deals with the UK, Mauritius, the UAE, the four EFTA countries (Switzerland, Norway, Iceland, and Liechtenstein), and Oman, in addition to an early harvest deal with Australia.
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