India and the European Union have completed negotiations on their long-awaited Free Trade Agreement (FTA), Commerce Secretary Rajesh Agrawal confirmed on Monday, January 26. The agreement is expected to be formally announced on Thursday, January 27.

Agrawal said the deal is balanced and designed to meet future needs. He added that the agreement is ready and is likely to come into force next year, after legal checks are completed.

The legal review of the text is expected to take five to six months, following which the agreement will be officially signed. According to Agrawal, the pact is expected to give a strong push to trade and investment between India and Europe.

The announcement comes during the visit of European Council President Antonio Costa and European Commission President Ursula von der Leyen to New Delhi.

Both leaders attended India’s 77th Republic Day celebrations and took part in the 16th India–EU Summit. Prime Minister Narendra Modi welcomed the EU leadership, saying their visit showed how strong ties between India and the European Union have become.

The European Commission also shared a post on X, saying both sides are working together to tackle global challenges and expand cooperation at the summit.

The pace of negotiations increased after Modi and von der Leyen agreed last year to fast-track the talks. Trade discussions, which restarted in 2022 after being paused for nearly ten years, gained urgency due to changes in global trade conditions.

These included higher tariffs imposed by the US under President Donald Trump. At the same time, talks on a possible India–US trade deal have not moved forward.

The final rounds of discussion mainly focused on automobiles and steel. The European Union pushed India to reduce import duties on European cars, which are currently over 100 percent. India, meanwhile, sought relief from EU rules affecting its steel exports.

According to Reuters, India may reduce tariffs on EU cars to around 40 percent, down from levels as high as 110 percent. However, some agricultural and dairy products have been kept out of the agreement to protect Indian farmers.

EU Trade Commissioner Maros Sefcovic described the agreement as the “mother of all deals,” a term earlier used by Ursula von der Leyen.

He said the pact could open large opportunities for European businesses and create one of the world’s biggest free trade areas, covering nearly two billion people. The agreement will also make it easier for European goods to enter the Indian market by lowering customs barriers.

Sefcovic said sensitive sectors were left out of the deal to ensure broad agreement and real benefits.

Calling it the biggest trade agreement ever, he noted that nearly 6,000 European companies already operate in India, and trade between the two sides has grown strongly over the past decade.

EU officials see the agreement as part of a wider plan to reduce dependence on the US and China. Indian policymakers, on the other hand, view it as a way to attract more foreign investment and improve access to European markets.

European Commission Vice-President Kaja Kallas also spoke about expanding cooperation beyond trade, including in security and defence. She noted that EU naval personnel participated in India’s Republic Day parade for the first time, highlighting the growing partnership.