India–EU Free Trade Agreement Concluded at 16th Summit: Explained

India and the European Union have achieved a major diplomatic and economic breakthrough. On January 27, 2026, during the 16th India–EU Summit, both sides formally announced the conclusion of negotiations on a long-awaited Free Trade Agreement (FTA). The summit, hosted by Narendra Modi, marks a turning point in India–EU relations after nearly two decades of negotiations.

Why in News?

India and the European Union signed documents announcing the conclusion of FTA negotiations and agreed on a Security and Defence Partnership, ending a negotiation process that began in 2007.

What Is the India–EU Free Trade Agreement?

• The India–EU FTA is a comprehensive trade agreement aimed at reducing tariffs, easing market access, and boosting trade in goods, services, and investments.
• According to the agreement together represents 25% of global GDP and nearly one-third of global trade, making it one of the largest trade deals in the world.
• With bilateral trade already exceeding $136 billion, the FTA is expected to further expand exports in textiles, gems and jewellery, leather, footwear, services, and manufacturing while improving investor confidence in India.

Why This FTA Is Historically Significant

• Negotiations for the India–EU FTA were first launched in 2007, but talks stalled in 2013 due to differences over tariffs, services, and regulatory standards. The negotiations were relaunched in June 2022.
• The 2026 conclusion finally ends a nearly 20-year-long process, earning the label “mother of all deals” from EU leaders.
• The agreement also comes at a time of shifting global trade patterns and growing uncertainties in transatlantic relations, giving India and the EU strategic autonomy.

Security and Defence Partnership (SDP)

• Alongside the FTA, India and the EU signed a Security and Defence Partnership (SDP).
• The pact aims to enhance cooperation in defence production, maritime security, cyber security, and interoperability between forces.
• It will allow Indian companies to participate in the EU’s SAFE (Security Action for Europe) programme, a €150 billion defence financing initiative.
• Talks are also set to begin on a Security of Information Agreement (SOIA) to deepen defence industrial collaboration.

Green Hydrogen and Strategic Cooperation

• The summit also saw the signing of an agreement to establish a Green Hydrogen Task Force, reflecting shared climate commitments.
• Both sides agreed to strengthen cooperation in clean energy, climate action, critical technologies, and supply chains.
• The deal complements India’s other major trade agreements with the UK and the European Free Trade Association (EFTA), positioning India as a central player in global economic networks.

Key Summary at a Glance

Question

Q. The India–EU Free Trade Agreement negotiations were originally launched in which year?

A. 2004
B. 2007
C. 2013
D. 2022