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India-EU trade deal likely to be finalized on January 27
23 Jan 2026

India and the European Union (EU) are likely to announce the conclusion of their long-running free trade pact negotiations on Tuesday.

The agreement, if finalized and ratified by the European Parliament, could lead to reduced tariffs on European cars and wine.

It would also open up markets for Indian electronics, textiles, and chemicals.

The announcement is expected after Prime Minister Narendra Modi's meeting with EU leaders Antonio Costa and Ursula von der Leyen during their visit from January 25-28.

Trade pact to boost Indian exports
Export benefits

The trade pact is expected to significantly boost Indian exports, especially in textiles and jewelry.

The negotiations for the agreement were resumed in 2022 after a nine-year hiatus.

They gained momentum amid rising global trade tensions, including US President Donald Trump's decision in August to double tariffs on Indian imports by up to 50%.

EU close to concluding trade agreement
Progress update

At the World Economic Forum in Davos, von der Leyen confirmed that the EU is nearing the conclusion of this trade agreement. She did, however, note that there is still some work left to be done.

The proposed deal comes after a series of significant pacts signed by the EU with countries such as Indonesia, Mexico, and Switzerland.

India-EU trade deal: A strategic move
Strategic significance

The potential India-EU trade deal comes at a time when both parties are looking to strengthen their global trade positions.

Bilateral trade between India and the EU stood at $136.5 billion in the fiscal year ending March 2024, making the 27-nation bloc one of India's top trading partners.

However, negotiators are still working to resolve differences on several sensitive issues, including India's reluctance to cut auto import tariffs sharply.

Non-tariff barriers and regulatory hurdles
Trade challenges

A major concern for India are non-tariff barriers like new carbon levies on steel, aluminium, and cement imports.

Industry experts say these barriers leave little room for relaxation.

Ajay Srivastava of Global Trade Research Initiative said duty-free access to the EU could compensate losses for Indian textile and jewelry exporters in the US but regulatory hurdles remain.