Business & Economics
India-EU Seal Long-Awaited FTA and Security Pact Ahead of 27 Jan Summit
After 18 years of on-and-off bargaining, Brussels and New Delhi have signalled they will formally declare FTA negotiations "concluded" and unveil a parallel security partnership when EU leaders meet Prime Minister Modi in Delhi on 27 January 2026.
Focusing Facts
- The agreement spans a combined market of roughly 2 billion people and about 25 % of global GDP, according to EU President von der Leyen’s Davos remarks.
- Von der Leyen says the FTA will scrap around €4 billion in annual duties for exporters, while restoring EU GSP benefits that had lapsed in 2023 for $76 bn worth of Indian goods.
- A separate EU-India Security & Defence Partnership—covering maritime security, counter-terrorism and cyber-defence—is slated to be signed during the same summit.
Context
Trade deals often crystallise at moments of geopolitical stress: NAFTA’s 1994 signing followed the 1980s U.S.–Japan frictions; the 1957 Treaty of Rome answered the Suez shock. Likewise, the India-EU FTA is gestating amid tariff salvos from Washington and supply-chain angst over Beijing—echoes of the 1973 oil embargo that forced economies to diversify energy sources. The event reflects two long-term currents: India’s slow shedding of the protectionism it adopted after 1947 and Europe’s post-Brexit search for partners outside the Atlantic sphere. By knitting together a quarter of world output, the pact could accelerate a 21st-century trade lattice built on ‘friend-shoring’ rather than U.S.-centric multilateralism. Or it could stumble on enforcement of carbon taxes and IP rules, just as the 1963 “Kennedy Round” faltered when politics trumped tariffs. On a 100-year horizon, success would mark a pivot in which the global South helps write trade rules, signalling that economic gravity is rotating toward a multipolar order; failure would merely reaffirm that mega-FTAs remain hostage to domestic politics and climate policy fault-lines.
Perspectives
European mainstream media
e.g., BBC — Presents the EU-India FTA as a long-awaited ‘mother of all deals’ that will let both sides decouple from unpredictable U.S. tariffs and Chinese supply chains while opening a huge two-billion-person market. Coverage leans toward Brussels’ talking points—spotlighting India’s need to ‘shed its protectionist carapace’ and underplaying thorny issues like CBAM compliance costs that could temper the win-win narrative.
Indian strategic-autonomy commentators
e.g., The Hindu, The Diplomat — Frame the pact as a geopolitical insurance policy that lets New Delhi and Brussels assert sovereignty, hedge against an ‘unreliable’ Washington, and model a multipolar order free of U.S. or Chinese vetoes. This camp foregrounds great-power realignment and nationalist pride, which can gloss over practical trade-offs—such as EU environmental standards or domestic sectoral pain—to valorise India’s foreign-policy independence.
Indian business and economic press with a cautionary tone
e.g., Business Standard, The Tribune — Acknowledges the FTA’s scale but dwells on unresolved flashpoints—market-access for autos, CBAM’s carbon levy, IP rules, and the near-certain exclusion of sensitive farm sectors—warning that the ‘final mile’ could still derail the timetable. By stressing sticking-points and domestic vulnerabilities, these outlets echo industry lobbies worried about EU competition and may downplay strategic upside to press negotiators for protective carve-outs.