---
title: 'After 20 Years, India and EU Close in on Trade Deal'
url: 'https://thediplomaticinsight.com/after-20-years-india-eu-close-trade-deal/'
author: 'Monitoring Desk'
date: '2026-01-27T11:55:00+05:00'
categories:
  - 'Trade and Investment'
---

# After 20 Years, India and EU Close in on Trade Deal

**New Delhi (TDI):** India and the European Union have finalized negotiations on a long-awaited trade agreement, officials said Monday, calling it a milestone in economic ties as both sides navigate increasingly tense relations with the United States.

The deal, expected to be formally announced on Tuesday, will allow freer trade of goods between India and the EU’s 27-member bloc, which together account for roughly a quarter of global GDP and a market of two billion consumers.

“It will be a balanced, forward-looking agreement that enhances economic integration with the EU and boosts trade and investment,” India’s Trade Secretary Rajesh Agrawal said. Bilateral trade between the two sides reached $136.5 billion in the fiscal year ending March 2025.

After nearly two decades of intermittent negotiations, the deal marks a significant opening of India’s traditionally protected market to Europe, its largest trading partner. Formal signing is expected after a legal review, which officials estimate will take five to six months, with implementation likely within a year, according to Reuters.

**Read More: [India, Europe Eye ‘Mother of All Deals’ Amid Growing Global Shifts](https://thediplomaticinsight.com/india-europe-eye-mother-of-all-deals/)**

The agreement follows a recent flurry of EU trade deals with other partners, including Mercosur, Indonesia, Mexico, and Switzerland, while India has also secured deals with Britain, New Zealand, and Oman. Analysts say the spate of agreements reflects broader global efforts to diversify trade amid tensions with Washington.

Last-minute talks addressed contentious sectors such as cars and steel. India is expected to reduce tariffs on EU car imports from as high as 110% to around 40%, while the EU is easing curbs on Indian steel. Certain sensitive agricultural and dairy products were excluded to safeguard millions of Indian farmers.

**Read More: [EU Warns India: Russia Ties Could Hinder Trade Deal Progress](https://thediplomaticinsight.com/eu-warns-india-russia-ties-could-hinder-trade-deal-progress/)**

The negotiations gained momentum after Prime Minister Narendra Modi and European Commission President Ursula von der Leyen agreed last year to fast-track the stalled talks, which had seen a nine-year hiatus.