EU on the cusp of historic trade deal with India, says Ursula von der Leyen

The European Union is about to sign a historic trade agreement with India, described as “the mother of all agreements”, announced the President of the European Commission, Ursula von der Leyen, on Tuesday January 20, 2026, affirming that this agreement would create a market for 2 billion people, or around a quarter of global GDP.

In a special speech in Davos at the World Economic Forum’s annual meeting, she said the real would provide a crucial advantage to Europe, one of the world’s most dynamic and fastest-growing continents.

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“Right after Davos, I will travel to India. There is still work to be done. But we are on the cusp of a historic trade deal. Some call it the mother of all deals,” she said.

“Europe wants to do business with the growth poles of today and the economic powers of this century.”

“From Latin America to the Indo-Pacific and beyond, Europe will always choose the world. And the world is ready to choose Europe,” she said.

European Council President Antonio Costa and Ms von der Leyen will be in India from January 25-27 to attend Republic Day celebrations as chief guests and hold summit talks with Prime Minister Narendra Modi.

Both sides are expected to announce the conclusion of negotiations on the much-awaited free trade agreement at the India-EU summit on January 27.

The president of the European Commission said the EU was also working on a new free trade deal with Australia.

“We are also making progress with the Philippines, Thailand, Malaysia, the United Arab Emirates and many more,” she added.

She also said that Europe would always stand by Ukraine until a just and lasting peace was achieved.

The European Union is India’s largest trading partner, with bilateral merchandise trade reaching $135 billion in the 2023-24 financial year. The free trade agreement is expected to significantly strengthen trade ties.

The proposed agreement is expected to bring qualitative change by deepening overall bilateral relations across a range of sectors, at a time when the world is witnessing trade disruptions due to Washington’s tariff policies.

In addition to strengthening the free trade agreement, the two sides are expected to unveil a defense framework agreement and strategic agenda at the summit.

India and the European Union have been strategic partners since 2004.

The ambitious FTA comes at a time of growing concerns over Washington’s trade and tariff policies, which have impacted both India and the 27-nation EU.

India and the EU are also expected to unveil a common overall strategic vision that will govern their relations for the period 2026-2030.

The EU and India first launched negotiations on a free trade agreement in 2007, before negotiations were suspended in 2013 due to a lack of ambition. Negotiations. Negotiations were relaunched in June 2022.

The proposed Security and Defense Partnership (SDP) will facilitate deeper defense and security cooperation between the two sides.

The SDP will bring interoperability in the defense domain and open up opportunities for Indian companies to participate in the EU’s SAFE (Security Action for Europe) programme. SAFE is the EU’s €150 billion financial instrument designed to provide financial support to member states to accelerate their defense preparedness.

At the summit, India and the EU are also expected to launch negotiations for a Security Information Agreement (SOIA). The SOIA is expected to strengthen defense industrial cooperation between the two sides.