India, European Union Poised to Finalise Free Trade Agreement by January 27

India and the European Union (EU) are on the verge of concluding a landmark Free Trade Agreement (FTA), with a formal announcement expected on January 27, a day after India’s Republic Day celebrations. Senior EU leadership will be in New Delhi for the occasion as chief guests.

According to sources, the India-EU summit scheduled for January 27 is likely to mark the successful conclusion of the FTA negotiations. Both sides are expected to adopt a joint document announcing the closure of talks, following which the agreement will undergo the necessary legal procedures and ratification by the European Parliament and the EU Council.

In addition to the trade pact, India and the EU are also expected to sign agreements on security and defence cooperation, as well as a mobility partnership aimed at facilitating employment opportunities for Indian professionals in EU member states.

European Council President Antonio Costa and European Commission President Ursula von der Leyen will attend India’s 77th Republic Day celebrations before jointly co-chairing the summit. In a first, a military contingent from the European Union will also participate in the Republic Day parade, underscoring the strengthening strategic partnership between the two sides.

Once finalised, the India-EU FTA will be the largest trade agreement India has ever signed, covering goods and services across the 27-member bloc, which is among India’s most important export destinations. Commerce Minister Piyush Goyal has described the proposed agreement as the “mother of all deals,” highlighting its economic significance.

With a combined market of nearly two billion people, the pact would connect two of the world’s largest democratic economies at a time of global economic uncertainty driven by trade tensions and geopolitical challenges. The European Union is currently India’s largest trading partner, with bilateral trade in goods reaching $135 billion in FY24. The FTA is expected to further enhance market access and deepen economic complementarities.

While negotiations are in advanced stages, discussions continue on certain sensitive issues, including the EU’s Carbon Border Adjustment Mechanism (CBAM). India has been seeking zero-duty access for its labour-intensive sectors such as textiles, leather, apparel, gems and jewellery, and handicrafts.

Commerce Minister Piyush Goyal recently confirmed that negotiations have entered their final phase. Earlier this month, he visited Brussels for high-level discussions with EU Trade and Economic Security Commissioner Maros Sefcovic to push forward a mutually beneficial agreement.

Goyal said the dialogue covered key areas of the proposed pact and reaffirmed both sides’ commitment to a rules-based trading system and a modern economic partnership that protects the interests of farmers and MSMEs while integrating Indian industry into global supply chains.

With inputs from IANS