EU-India Trade Deal: Costa Arrives as ‘Mother of All Deals’ Nears Completion

EU-India Trade Deal: Costa Arrives as ‘Mother of All Deals’ Nears Completion

January 25, 2026 discoverhiddenusacom Business

A potentially landmark trade agreement between the European Union and India is nearing completion after nearly two decades of negotiations. European Council President Antonio Costa arrived in India on Sunday as preparations intensify for a summit on Tuesday where officials hope to finalize the deal, which has been dubbed the “mother of all deals.”

A Historic Partnership Takes Shape

Costa, along with European Commission President Ursula von der Leyen, will be guests of honor at India’s Republic Day celebrations in New Delhi on Monday. The EU Council stated via X (formerly Twitter) that President Costa’s visit is directly related to the 16th EU-India summit taking place on Tuesday. This summit presents an opportunity to strengthen the existing strategic partnership between the two entities.

Did You Know? Bilateral trade in goods between the EU and India reached €120 billion ($139bn) in 2024, representing a nearly 90% increase over the past decade.

Economic Significance for Both Sides

India is currently the world’s most populous nation and is projected by the International Monetary Fund (IMF) to become the fourth-largest economy this year. The EU views India as a crucial future market, while New Delhi sees the European bloc as a vital source of technology and investment needed to modernize its infrastructure and generate employment opportunities.

Expert Insight: The pursuit of this trade agreement reflects a broader trend of major economic powers seeking to diversify partnerships and reduce reliance on single-nation supply chains, particularly in light of recent geopolitical pressures and trade disruptions.

Ursula von der Leyen stated that they are “on the cusp of a historic trade agreement.” Current trade includes €60 billion ($69bn) in services, in addition to the €120 billion in goods.

Remaining Hurdles and Geopolitical Context

While progress has been made, negotiations are still ongoing. Key sticking points include the potential impact of the EU’s carbon border tax on Indian steel exports, as well as differing safety and quality standards in the pharmaceutical and automotive industries. The agreement is seen as a way for both Brussels and New Delhi to expand market access amid challenges posed by US tariffs and Chinese export controls.

Kaja Kallas, the EU’s top diplomat, emphasized that the EU and India are strengthening ties at a time of increasing pressure on the rules-based international order due to conflicts, coercion, and economic fragmentation.

Both India and Europe are actively working to diversify their supply chains. New Delhi has been reducing its dependence on Russia for military hardware, while simultaneously promoting domestic manufacturing. Europe is similarly seeking to lessen its reliance on the United States.

Frequently Asked Questions

What is the primary goal of the EU-India summit?

The primary goal of the summit is to finalize a free trade agreement that has been under negotiation for nearly two decades.

What is the current state of trade between the EU and India?

Bilateral trade in goods reached €120 billion ($139bn) in 2024, with an additional €60bn ($69bn) in trade in services.

What are some of the remaining challenges to completing the trade agreement?

Remaining challenges include the impact of the EU’s carbon border tax on steel exports and differing standards in the pharmaceutical and automotive sectors.

As negotiations conclude, it remains to be seen whether a final agreement can be reached, and if so, what the long-term implications will be for both the EU and India.