‘Mother of all deals’: India and EU finalise FTA

India and the European Union finally agreed on a Free Trade Agreement. This is something they have been talking about for twenty years but they could not agree until now. The European Union Commission President, Ursula von der Leyen said that the Free Trade Agreement is a big deal. She even called it the important deal of all the deals that the European Union has made which is why she said it is “the mother of all deals”. The Free Trade Agreement between India and the European Union is an agreement that will affect trade, between India and the European Union. The numbers in the news from Indian sources are really big when it comes to tariffs. They say that tariffs will be removed or lowered on about 96 to 99 percent of the trade between Europe and India. This is a lot of trade. They also have plans for cars and electric vehicles. Some foods like products will not have tariffs. The deal includes things like goods and services and investments. It also includes customs. Working together on rules. People will be able to move a bit more for work and they will also work together on research. The trade between Europe and India will be a lot easier because of this deal, on Indian tariffs. The agreement is not done yet. It needs to be checked by lawyers and approved by the European Union institutions and the European Union member states and also, by India. The European Union and India have to say it is okay before the agreement can actually start.

1) Why this matters (scale and strategic importance)

India and the European Union are really trading partners. They have a market with about 2 billion people. The money they make together is a lot. We are talking about tens of trillions of dollars. Some people say India and the European Union have a market that’s as big as 27 trillion dollars. This makes the trade agreement, between India and the European Union very special and very large. India and the European Union have a lot to gain from this trade agreement because of their market.

2) Let us look at the timeline that explains how the company got to where it is today this is the story of how the company got here the short timeline is really what shows us how the company got here.

Negotiations have started between India and the European Union. The India and European Union talks have been going on. Then stopping again for about 20 years now. There have been rounds of these India and European Union talks but they keep getting paused because of changes in politics things that people in India and the European Union feel strongly about and disagreements over technical issues, with the India and European Union negotiations.

The deal got done fast and it was finished. This happened when the leaders of India and the European Union got together in New Delhi at the end of January 2026. They had been talking about it a lot for a months, before that. The leaders said the deal was done on January 27 2026. The India and European Union deal was finished after they talked about it much.

3) The main points of the deal. This is what the deal is about based on what we know so far, about the headline terms of the deal and what the deal contains.

The texts still have to be checked by lawyers. What people are saying and what the European Union and India are saying give us the main ideas:

Coverage and tariff cuts

People are saying that a lot of the tariffs on trade are going to be eliminated or reduced a lot. The numbers that are being talked about are really high like 96.6 percent, which’s what some people in the European Union are saying. Some people even think it could be as high as 99.5 percent for kinds of trade but it depends on how you count it and who is doing the counting. The reason we are seeing numbers is that some people are counting by how much money is involved and others are counting by how many tariffs there are. We will have to wait for the official paperwork to get the details, on trade and tariffs and how they will be treated.

The European Union says this deal will get rid of or taxes on a lot of the things it sells to India. This includes things like machines, chemicals, medicines, cars, wine and liquor. The European Union thinks it will save, around four billion euros every year on taxes. They have talked about this in public.

Sensitive exclusions

India and the European Union have some rules to protect things like dairy and rice and sugar and soya and beef. They do this so that these things are safe from countries.

Agriculture is an important thing for India and for some parts of the European Union. In the past this has been an issue, for them.

Autos and quotas

Cars are a big deal when it comes to politics. The reports say that the agreement has a system where they limit the number of cars and slowly reduce the tariffs over time. The agreement is about cars and how they will be traded. Cars will have a quota system and the tariffs, on cars will be reduced in phases.

The numbers of cars that can be imported are as follows: for example 160,000 internal combustion engine cars and 90,000 electric vehicles from the European Union get treatment. These numbers come from reports by India and the European Union and from news stories by Reuters. The European Union and India said what these numbers are. For cars that’re not part of this special group, the taxes on imports are higher or different. The internal combustion engine cars and electric vehicles have rules when they are imported from, outside these special groups. Cars that are over the quotas are dealt with in parts. The tariffs for these cars decrease over time to levels. For example the tariffs start at around 30 to 35 percent. Then go down to about 10 percent.

The time it takes for the tariffs to decrease is different according to India and the European Union. India says it will take five years for the tariffs to decrease. On the hand an official from the European Union says it will take ten years.

The tariffs for vehicles will be cut later on starting from the fifth year.

This kind of compromise is what you usually see in big free trade agreements like the one, between India and the European Union, where Cars and electric vehicle tariffs are being discussed. Cars and electric vehicle tariffs are a part of these agreements.

Rules on services, investment, and mobility

The package is said to include things that help companies do business in each others countries like protecting investments and making it easier for European Union suppliers to work with India and for Indian suppliers to work with the European Union. It also talks about letting some people move to the country for work but only for a short time and only for certain jobs, like people who work for the same company in different countries or people who have a contract to do a specific job. However the European Union is not talking about making it easy for lots of people to move to the country to live. The European Union really wants to make it easier for companies to sell services to each others countries and to work together to make rules for businesses. The European Union and India want to work to make trade easier, for European Union services and Indian services.

Regulatory cooperation, customs, and standards

The deal is really good because it makes it easier to get things across the border. This is what the deal includes:

* customs facilitation

* working together on regulations

* agreeing on standards for some products

* and making it easier to deal with -tariff barriers.

All of these things are important for the trade between countries to actually increase, not on paper with tariff numbers but in real life, with trade flows of the trade.

Trade & climate / green transition

The European Union reportedly talked about working with India on making industries cleaner and using less carbon. They even said they would give India money like five hundred million euros to help with this. The European Union wants India to do things that’re similar to what they are doing in Europe to reduce carbon. This way it will be easier to work. The free trade agreement between the European Union and India includes rules, about taking care of the climate and working together on this issue. The European Union and India are making promises to each other to do things that will help the environment.

Safeguards, dispute settlement, and phased implementation

We can expect to see some rules to protect us like conditions and waiting periods to handle situations where a lot of things are imported all at once. There will also be ways to resolve disagreements. The final document will have all the details, about how to solve disputes, including groups and rules to prevent problems. These are usually the things people talk about a lot when they are discussing whether or not to approve the agreement. The exact words were not available when it was first announced because the lawyers are still reviewing everything.

4) So let us look at how the two sides talked about the deal. We want to know how the politics and spin affected what they said. The two sides had ideas about the deal and they presented it in their own way. This is what we mean by politics and spin when we talk about the deal. The deal was important. The two sides used politics and spin to make their points, about the deal.

The European Union framing of this deal is that it is a success for the European Union. The European Union says that this deal is good for businesses because it lets them sell things to more people. It also helps the European Union work closely with a friend. The European Union leader Ursula von der Leyen said it is the “mother of all deals” which got a lot of attention because it shows how big this deal really is. People, in Europe talked about this deal as part of the European Unions plan to work with countries and make sure European businesses have the things they need to keep working. The European Union wants to make sure it has friends to trade with like this important partner.

Indias framing is really about Indias leadership saying this is a deal. They think it is a breakthrough. This means India gets to keep doing things its way at home. At the time India can sell more things to other countries. The Indian government and the newspapers in India are happy about this. They like that Indias farms are protected. They also like that some industries have time to get used to the changes. The Indian government says this is a success. They say it is good for Indias economy and its relationships with countries. Indias Press Information Bureau says this is a milestone, for India.

5) Economic impact — winners, losers, and sectoral effects

Likely winners

European people who sell things like machines and cars to countries as well as fancy food and drinks like wine and olive oil will probably do better in India. This is because India and the European countries are going to work to reduce taxes on imports and make rules that are similar.

European companies that make car parts, machines for factories, special kinds of chemicals and expensive things that people want to buy will likely sell more of these things in India. European exporters of capital goods, machinery, cars and luxury food and drink, like wine and olive oil and other specialty products will be able to sell more in India because it will cost them less to do business.

Indian exporters who are already good at selling things to the European Union like people who make textiles or leather or gems and jewellery and some people who sell fish and software and business services will probably get to sell their things to the European Union without having to pay much. This is a good deal, for them. Some people think that almost all of the things that India sells to countries about 99 percent of Indian exports will get to be sold without having to pay as much but it depends on how you count these things.

Service providers and professional services from both sides could get chances in the long run if the services chapter fixes the problems that are causing delays. The services chapter can really help service providers and professional services from both sides if it reduces the bottlenecks. This will be good for service providers and professional services, from both sides.

Potential losers or vulnerable actors

Indian companies that make things in India will feel the pressure from companies. This is because European companies will now be able to sell their things in India and compete with companies. Some Indian farmers will also feel the pressure because they will have to compete with farmers who can sell their produce in India.

The good news is that the deal does not include many of the farm products that European farmers produce. This means that European farmers will not be affected much as they thought they would be. However some people in Europe are still worried about what this deal will mean for them. The deal is still a concern, for farmers who produce certain things that will compete with Indian products.

Small companies in our country that make things may get hurt if they cannot change enough when there is more competition. This is because they need help, from our government to adjust to the situation. The government should have policies to help these domestic producers so they do not get left behind when there is more competition.

Wider macro effects

The deal is going to make it easier for companies to invest in each others countries. This means foreign direct investment flows will go up for direct investment both ways. Companies will move their supply chains around. Invest money to get better access to markets under special rules. They will also set up factories in places to meet the rules about where things are made which are called rules of origin for rules of origin.

When customs and regulations are more aligned it will be easier to trade things that are used to make things, like parts and materials. This could also make supply chains for supply chains work better over a longer distance.

6) Geopolitical and strategic context

The Free Trade Agreement comes at a time when the whole world is changing the way it thinks about trade. The United States is getting tougher on trade people are worried about getting the things they need from China and the European Union wants to be more independent. The European Union and India are getting closer when it comes to business, which’s good for both of them. They both want to work with people and have strong partnerships. People who watch these things say that this deal is not about money it is also about working together in a complicated world. The European Union and India are forming an alliance that is not part of the usual groups. This Free Trade Agreement is important, for the European Union and India because it helps them with their goal of working.

7) Ratification, legal vetting, and the road ahead

People in charge said they will check the text to make sure it is okay with the law on both sides. The European Unions questions and answers and press releases say that the agreement needs to be put into a legal document and then reviewed. This means the European Union agreement will have to be translated into instruments and the European Union agreement will have to be looked, at carefully.

The European Union ratification process is pretty complicated. For the European Union free trade agreements of this scope usually need to be approved by the European Commission and the European Parliament. Sometimes individual European Union member states also have to give their approval depending on what areas the free trade agreements cover. This means that the European Union has to go through a political and parliamentary process. The European Union may have to make some changes to the laws that put the free trade agreements into effect. The European Union also has to talk to people, in each country to get their thoughts on the matter.

Indias domestic procedure is that India has to finish its internal checks and get the cabinet to approve things. The Parliament of India might also get involved to make some changes, to the laws or tariffs and standards. The Press Information Bureau put out a statement saying that things are moving forward and that there are more steps that India needs to take.

The Timing is important here. Journalistic coverage said that the implementation of the rules could happen within about a year but this is subject, to ratification. The exact dates will depend on the steps that need to be taken and whether any member states have objections or want to renegotiate certain aspects during the approval process. The Timing will be affected by the steps and the approval process of the member states.

8) Criticisms, open questions, and risks

When it comes to trade deals people at home always have something to say. The European Union farmers and some industries in our country are going to be really careful about what is in the final agreement. The same thing is true for farmers in India and small businesses that make things. They will all take a close look at the details. We can expect to see a lot of discussion about this in the places where our laws are made. Domestic political opposition, to these trade deals is something that happens all the time. Domestic political opposition will likely be an issue here.

The rules for working with the European Union and India are very complicated. This is because of things like where products come from how many cars and electric vehicles can be. Making sure the rules are the same in both places. People will probably disagree about what these rules mean so there will be arguments. These arguments will show if the systems for solving disputes actually work.

For example India and the European Union have already said things about how long it will take to start following the rules for cars. India says it will take five years and the European Union says it will take ten years. This shows that what politicians say can be different, from what the official rules say. In the end the official rules are what really matter.

Climate and green rules are an issue. The European Union wants companies to reduce their carbon footprint and follow rules. This can cause problems, for businesses because they will have to spend money to meet these new green rules. The European Union is also thinking about introducing carbon border measures. At the time India needs to reduce the carbon footprint of its industries. So it is very important for the European Union and India to work together on climate and green issues. The European Union and India will have to cooperate with each other to make sure that both sides can meet their climate and green goals.

9) What to watch next (concrete markers)

The company will publish the final version of the law. This will include the details of the tariffs the limits, on how much of something can be imported the time it will take to put these rules into effect and the conditions under which the rules can be changed to protect the countrys businesses. The publication of the legal text will show the exact tariff schedules, quotas, phase-in periods and safeguard language.

The European Union legal team will check everything carefully. The European Parliament will have a reaction. We will see what the committees say during their debates. They will also make some changes and vote on things. This will give us an idea of the problems that the European Union legal vetting and the European Parliament reactions will face.

Member-state responses. Some European Union member states might have problems with things like agriculture, standards or the ability of people to move to countries for work. European Union member states could have some concerns, about these things.

Indias cabinet approval is a deal and people in the parliament and industries are talking about it.

In India people are discussing what this means for them.

They are looking at what the cabinet approval will do to companies and industries in India.

This will show us which companies in India will do well and which ones will not do well because of the cabinet approval.

The reactions from people in India will tell us a lot, about what the cabinet approval means for India and its industries.

The rules for each sector like customs procedures and rules of origin and automotive quotas are really important. These technical annexes will determine how goods actually move in the world. Sectoral implementation guidance, like customs procedures and rules of origin and automotive quotas will have an impact, on this.

10) Bottom line assessment

When it comes to the economy the Free Trade Agreement will have an impact if it happens as planned. The Free Trade Agreement will be one of the important trade deals between two countries in a long time. It will open up markets for both sides and get people to invest and change how things are made and sold. The main points of the deal like covering 96 to 99 percent of things and saving money on tariffs show that this is an agreement to open up markets for many things that are made and for services. The Free Trade Agreement is really, about making it easier for people to buy and sell things between countries.

When it comes to politics this deal is as much about how India fits into the world as it is about money. It shows where India stands and how the European Union is looking for friends to work with.. The thing is politics plays a big role here. There will be fights over whether or not to approve the deal and some people in India and the European Union will not be happy about it. People will also look closely at the details especially when it comes to things like cars, farming, electric vehicles and making sure the rules are the same for everyone. All of these things will affect what the deal actually does for India and the European Union. The deal is a thing, for India and the European Union and India and the European Union will have to deal with the consequences.

Uncertainties: The final text, ratification process and implementation detail (especially quotas and phase-down timetables for autos/EVs) will determine winners and losers. The differences in how the EU and India described phase-in timings in early reporting show that language in the legal text — not press lines — will be decisive.