Brussels: The European Union and India have moved a step closer to finalising one of the world's biggest trade agreements, with European Commission President Ursula von der Leyen expressing confidence that the deal will be formally signed before the end of 2026.
Speaking on the sidelines of the Group of Seven summit, von der Leyen said both sides are progressing through the final legal and administrative procedures required before the agreement can be officially signed and brought into force. Her comments mark another significant milestone in a trade partnership that has been under negotiation for nearly two decades.
The free trade agreement is expected to reshape economic ties between the European Union and India, creating new opportunities for businesses, investors and consumers across both markets. Together, the two economies represent a market of around two billion people and account for a substantial share of global trade and economic activity.
Negotiations between India and the European Union began in 2007 but faced several delays over the years due to disagreements on tariffs, market access and regulatory standards. Talks gained fresh momentum in recent years as both sides sought stronger economic partnerships amid changing global trade patterns and geopolitical uncertainties.
A political agreement on the trade pact was reached earlier this year after intensive rounds of negotiations. Since then, officials have been working on the legal review, translation and ratification processes needed before the agreement can be formally signed.
The deal is expected to significantly reduce tariffs on a wide range of goods traded between India and the European Union. European companies are likely to gain better access to India's rapidly growing market, while Indian exporters are expected to benefit from easier entry into European markets.
Industry experts believe sectors such as textiles, garments, engineering products, pharmaceuticals, information technology services and jewellery could see major gains from the agreement. European manufacturers, particularly in sectors such as automobiles, machinery, chemicals and luxury goods, are also expected to benefit from lower trade barriers.
The European Union is already India's largest trading partner. Bilateral trade in goods and services has grown steadily over the past decade, reflecting the increasing economic importance of the relationship. Policymakers on both sides believe the new agreement will accelerate this growth and encourage greater investment flows.
According to estimates from European officials, the trade pact could substantially increase exports and economic activity over the coming years. Some projections suggest that European exports to India could potentially double by the early 2030s as a result of improved market access and lower tariffs.
The negotiations involved several sensitive issues that required compromise from both sides. Among the most challenging topics were import duties on European automobiles, tariffs on wine and spirits, intellectual property protections, digital trade rules and sustainability commitments.
Reports from various international media organisations have indicated that compromises were reached in several areas, allowing negotiators to overcome long standing obstacles. India is understood to have agreed to gradual tariff reductions in certain sectors, while the European Union made concessions aimed at addressing India's development priorities and economic concerns.
Trade analysts say the agreement comes at a time when countries around the world are seeking to diversify supply chains and strengthen economic resilience. Global trade has faced numerous disruptions in recent years due to geopolitical tensions, conflicts and economic uncertainty, prompting governments to pursue new partnerships and reduce dependence on single markets.
For India, the agreement aligns with its broader strategy of expanding trade ties with major economies and attracting foreign investment. The country has already concluded or advanced trade negotiations with several partners as it seeks to position itself as a key manufacturing and investment destination.
For the European Union, deeper engagement with India is viewed as strategically important because of the country's fast growing economy, large consumer market and increasing role in global supply chains. European leaders have repeatedly highlighted India as a crucial partner in areas ranging from trade and technology to climate action and energy cooperation.
Beyond economic benefits, the agreement is also expected to strengthen political and strategic ties between the two sides. Officials have increasingly described the India European Union relationship as a key pillar of international cooperation in an era of global uncertainty.
While the political agreement has already been reached, several procedural steps remain before the treaty can officially take effect. Legal experts must complete detailed reviews of the text, and the agreement will need approval through the required institutional processes on both sides.
Despite these remaining steps, the latest comments from Ursula von der Leyen suggest that both India and the European Union remain committed to keeping the process on track. If the current timeline is maintained, the formal signing of the agreement by the end of 2026 will mark the successful conclusion of one of the most ambitious and long awaited trade negotiations in modern economic history.
The signing would not only deepen economic ties between India and Europe but also send a strong signal about the importance of open trade and international cooperation at a time when many countries are rethinking their economic relationships in an increasingly complex global environment.