India, EU likely to clinch FTA deal by Jan 27

January 20, 2026

India and the European Union (EU) are on the verge of concluding a historic Free Trade Agreement (FTA), with a formal announcement expected on January 27, a day after India’s Republic Day celebrations. The announcement is likely to be made during the India-EU summit, where both sides are expected to adopt a joint document declaring the successful conclusion of FTA negotiations. Following this, the agreement will undergo legal scrutiny and ratification by the European Parliament and the European Council.

European Council President Antonio Costa and European Commission President Ursula von der Leyen will attend India’s 77th Republic Day celebrations as chief guests and later jointly co-chair the summit. In a symbolic first, a European Union military contingent will participate in the Republic Day parade, underscoring the deepening strategic partnership between India and the EU.

Largest Trade Deal for India, Covers Goods and Services

The India-EU FTA is expected to be the largest trade agreement India has ever signed, covering trade in both goods and services with the 27-member European Union, one of India’s biggest export destinations. Commerce Minister Piyush Goyal has described the proposed agreement as the “mother of all deals”, highlighting its economic and strategic importance.

With a combined market of nearly two billion people, the agreement will link two of the world’s largest democratic economies at a time of global economic uncertainty driven by US tariff disruptions, supply chain challenges and geopolitical tensions. The European Union is currently India’s largest trading partner, with bilateral trade in goods touching $135 billion in FY24, and the FTA is expected to significantly boost market access and strengthen economic complementarities.

Sensitive Issues Remain, Mobility and Security Pacts Also Planned

While negotiations have advanced rapidly, some sensitive issues remain under discussion, including the EU’s Carbon Border Adjustment Mechanism (CBAM), which India has raised concerns over. India is also pressing for zero-duty access for its labour-intensive sectors such as textiles, leather, apparel, gems and jewellery, and handicrafts, which are crucial for employment generation.

Alongside the trade agreement, both sides are also expected to sign a security and defence partnership agreement and a pact aimed at enhancing mobility for Indian professionals seeking employment opportunities in the EU. Last week, Commerce Minister Piyush Goyal confirmed that negotiations had entered the final stage, following his visit to Brussels for high-level discussions with EU Trade and Economic Security Commissioner Maros Sefcovic.

“During this dialogue, we deliberated across key areas of the proposed agreement. We reaffirmed our commitment to a rules-based trading framework and a modern economic partnership that safeguards the interests of farmers and MSMEs while integrating Indian industries into global supply chains,” Goyal said.