India and the European Union are set to move a step closer to a landmark trade partnership, with both sides expected to announce the conclusion of Free Trade Agreement (FTA) negotiations by 27th January. The deal is being positioned as a major boost to bilateral trade and economic cooperation.

EU leaders are expected to meet Prime Minister Narendra Modi around the time of the announcement. Commerce Minister Piyush Goyal has earlier described the pact as the “mother of all deals.” This signals its scale and strategic importance for both sides.

Once negotiations conclude, India and the EU will begin finalising the legal text of the agreement. The FTA will then require approval from the European Parliament and a decision by the EU Council before being formally signed. Officials are targeting completion of signing and ratification by 2026.

Negotiators have reportedly reached a balance on sensitive sectors such as agriculture and dairy. At the same time, they are respecting key red lines on both sides. The EU has agreed to offer greater market access for India’s labour-intensive exports. This could potentially boost manufacturing and employment.

Talks on the automobile trade are still underway. EU car exports to India are expected to be covered under a tariff reduction quota. Duties will be phased based on fuel type and vehicle segment. Discussions on quotas and tariff levels are continuing.

EU wines and spirits are also likely to gain improved access to the Indian market, especially as exports to the US face the risk of steep tariffs. On climate policy, the EU will retain its Carbon Border Adjustment Mechanism (CBAM). However, it has committed to supporting Indian companies in their decarbonisation efforts.

Beyond trade, India and the EU are expected to sign a Memorandum of Understanding on the mobility of professionals. This will ease the movement of skilled workers and strengthen long-term economic ties.

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