Published by Global Banking & Finance Review®
Posted on January 27, 2026
2 min readLast updated: January 27, 2026
Add as preferred source on GoogleIndia and the EU have finalized a landmark trade deal, covering a quarter of the global economy, after nearly two decades of negotiations.
NEW DELHI, Jan 27 (Reuters) - India and the European Union have finalised a landmark trade deal that will represent a quarter of the world's economy, Indian Prime Minister Narendra Modi said on Tuesday, as the two sides seek to hedge against fickle ties with the U.S.
After nearly two decades of on-off negotiations, the deal will pave the way for India to open up its vast and guarded market, the world's largest, to free trade with the 27-nation EU, its biggest trading partner.
Trade between India and the EU stood at $136.5 billion in the fiscal year through March 2025.
The agreement comes days after the EU signed a pivotal pact with the South American bloc Mercosur, following deals last year with Indonesia, Mexico and Switzerland.
During the same period, New Delhi finalised pacts with Britain, New Zealand and Oman.
The spate of deals underscores global efforts to hedge against the United States as President Donald Trump's bid to take over Greenland and tariff threats on European nations test longstanding alliances among Western nations.
Trump has imposed a 50% tariff on goods from India and an India-U.S. trade deal collapsed last year after a breakdown in communication between the two governments.
The formal signing of the India-EU deal would take place after legal vetting expected to last five to six months, an Indian government official aware of the matter has said.
"We expect the deal to be implemented within a year," the official added.
(Reporting by Shivangi Acharya and Manoj Kumar, Editing by Raju Gopalakrishnan)
Economic impact refers to the effect that an event, policy, or trade agreement has on the economy, including changes in employment, income, and overall economic growth.
Financial markets are platforms where buyers and sellers engage in the trade of financial assets such as stocks, bonds, currencies, and derivatives.
The global economy refers to the interconnected economies of countries around the world, influenced by international trade, investment, and financial markets.
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