While Donald Trump is continuing his series of tariff attacks and issuing new threats, India is playing a completely different game. Amidst the tariff tension, India is about to sign its biggest deal (India-EU Trade Deal) with the European Union, and it can be announced tomorrow, January 27.
European Commission President Ursula von der Leyen is also on a visit to Delhi. Reports quoting officials associated with the matter say that the India-EU FTA aims to eliminate tariffs on more than 90% of traded goods, and Ursula von der Leyen has described the agreement as the ‘mother of all deals’. Let us understand how India will benefit from this deal.
‘A market of 2 billion people will be created’
EU Chairperson Ursula von der Leyen appeared very excited about this Free Trade Agreement (FTA) with India during her visit to Delhi. In his first message after reaching Delhi, he said that India and EU together can help heal the world struggling with conflict, protectionism and political instability. According to reports, this deal can be announced on January 27.
India benefits from FTA with EU
Global Trade Research Initiative (GTRI) said in its report released on India-EU trade deal on Sunday that this FTA is expected to be announced on January 27. This can help domestic industries to reduce costs and increase business. GTRI Founder Ajay Srivastava says that the reduction in tariffs under the Free Trade Agreement will mainly reduce input costs and increase trade volume, which will benefit producers and consumers on both sides. According to officials associated with the matter, India-EU FTA can reduce or eliminate tariffs on more than 90% of goods, which will greatly benefit sectors like textiles, pharmaceuticals, engineering products and IT services. Ursula von der Leyen described it as the biggest deal yet, saying it would create a market of 2 billion people, which would be about a quarter of global GDP. He expressed his happiness on visiting India in a post on social media platform Twitter (now X).
$136 billion trade
If we look at the trade data for FY2025, the trade between India and the European Union stood at more than $136.53 billion. Talking about imports, India imported $60.7 billion from the European Union. High-category machinery topped the import list with $13 billion. Electronics imports totaled $9.4 billion, including mobile phone parts ($3.7 billion) and circuits ($890.5 million). India also imported aircraft worth $6.3 billion, medical and scientific instruments worth $3.8 billion and specialty medicines worth $1.4 billion.
India’s exports to EU
Talking about exports, India’s exports to the European Union in FY2025 were worth $75.9 billion. This was mainly due to labour-intensive sectors. However, refined petroleum products topped the list with exports worth $15 billion, which included diesel exports worth $9.3 billion and ATF exports worth $5.4 billion. Electronics exports were worth $11.3 billion, which included smartphones worth $4.3 billion.
Textile exports from India were worth 4.5 billion dollars. Other major export categories included machinery and computers worth $5 million, organic chemicals worth $5.1 million, iron and steel worth $4.9 million and pharmaceutical products worth $3 million. Gems and jewelery exports to the EU totaled $2.5 billion, mainly consisting of cut and polished diamonds worth $1.6 billion. Automobile exports reached $2.2 billion.
India will get access to the markets of 27 countries
This trade agreement with the EU is also important for India because of its potentially large scope. For Brussels, India has emerged as a key partner in reducing its dependence on China and strengthening ties with countries considered strategic allies. This deal will give India greater access to the markets of 27 member countries of the European Union and boost its exports.
