India–EU Trade Agreement Sets New Benchmark, Unlocks Vast Growth Potential: PM Modi

Prime Minister Narendra Modi on Tuesday termed the newly finalised free trade agreement (FTA) between India and the European Union as a defining moment for the country’s economic engagement with the world, stating that it would create far-reaching opportunities for businesses, consumers and the skilled workforce.

Addressing a joint media briefing at Hyderabad House with European Commission President Ursula von der Leyen, the Prime Minister said the agreement symbolises deepening confidence between India and the EU, rooted in shared values and a mutual resolve to promote peace, stability and cooperation in an uncertain global landscape.

As part of the agreement, India will remove or lower tariffs on more than 90 per cent of goods imported from the European Union.

India will gradually reduce import duties on machinery, chemicals and pharmaceutical products, while it will cut tariffs on European beer to 50 per cent. The country will also abolish levies on aircraft, spacecraft and most chemical items entirely.

The European Union has projected that the agreement could lead to a doubling of its exports to India by 2032, with European businesses expected to save up to €4 billion annually in customs duties. As the EU accounts for around 17 per cent of India’s exports, Indian companies will gain easier access to a large and high-value market.

Boost to Sustainability and Employment

Beyond trade, the pact includes a €500 million support package from the EU over the next two years to help India curb emissions and advance its green transition.

EU exports to India currently support around 800,000 jobs in Europe, and the agreement is expected to create additional employment across multiple sectors.

The deal spans markets with a combined population of nearly two billion and serves as a strong response to volatility in the global trading system.

In addition to the trade agreement, India and the EU signed a mobility arrangement aimed at simplifying movement for Indian students, professionals and workers across European nations.

The summit also marked the launch of a dedicated EU–India Security and Defence Partnership, reflecting closer alignment on strategic and security matters.

European Commission President Ursula von der Leyen described the agreement as the ‘mother of all deals’, noting that it represents the start of an even more robust and comprehensive strategic partnership between India and the European Union.

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