New Delhi, 27 January. Prime Minister Narendra Modi will host the 16th India-European Union (EU) summit in the national capital on Tuesday, where European Commission President Ursula von der Leyen and European Council President Antonio Costa will announce the biggest ever trade agreement between India and the EU, which is being called the ‘mother of all agreements’. According to Commerce Secretary Rajesh Aggarwal, the long-running Free Trade Agreement (FTA) negotiations between India and the European Union have been completed. The completion of this agreement will be officially announced at the 16th India-EU Summit.

This summit will provide an opportunity to take forward the strategic partnership between India and EU. Under this, cooperation will be strengthened in important areas like trade, security and defence, clean energy and people-to-people cooperation. According to officials, the agreement will be signed in about six months after legal scrubbing. After this, this agreement is expected to come into force from next year. The last few years have seen positive momentum in the relations between India and EU. It is in this environment that this summit is being organized.

Rajesh Aggarwal described this agreement as balanced and keeping in mind the future needs. He said that this will increase economic cooperation between India and EU and will give new impetus to trade and investment. India-EU Free Trade Agreement is being considered a big step towards increasing India’s global trade. This agreement can also help in reducing the impact of high US tariffs, as it will provide more opportunities to Indian products in the European market. Especially products like clothes and jewelery can benefit.

This agreement will have a major impact on the automobile sector. Under this, the Indian market will be opened for European car companies. Currently, there is 110 percent import duty on European cars, which can be reduced to about 40 percent. This may make cars of companies like Volkswagen, Mercedes-Benz and BMW cheaper in India. At present, the share of European companies is only 4 percent of the 44 lakh cars sold every year in India.

The European Union is already a major trading partner of India. The EU’s share in India’s total exports is about 17 percent, while India’s share in the EU’s total foreign exports is about 9 percent. The total trade in goods between India and the EU in the financial year 2024-25 stood at $ 136.53 billion. In this, India’s export was 75.85 billion dollars and import was 60.68 billion dollars. In this way the EU became India’s largest trading partner. Apart from this, trade in services between the two will also reach $83.10 billion by 2024.