New Delhi: India and the European Union are nearing what could become a landmark free trade agreement that would create a combined market of about two billion people and account for nearly a quarter of global GDP, European Commission President Ursula von der Leyen said on Tuesday, describing the prospective deal as “historic” and potentially transformative for ties between New Delhi and the 27-nation bloc.
Von der Leyen’s remarks come just ahead of her visit to New Delhi, during which she and European Council President Antonio Costa are scheduled to be in India from January 25 to 27. The two leaders are expected to attend Republic Day celebrations as chief guests and hold summit talks with Prime Minister Narendra Modi. The India-EU summit on January 27 is likely to serve as the venue for announcing the conclusion of negotiations on the free trade agreement.
Speaking in a televised address at the World Economic Forum in Davos, von der Leyen said she would travel to India in the coming days as the sides move closer to concluding negotiations on the long-pending Free Trade Agreement (FTA). “I will travel to India. There is still work to do. But we are on the cusp of a historic trade agreement,” she said. “Some call it the mother of all deals. One that would create a market of 2 billion people, accounting for almost a quarter of global GDP.”
The European Union is already India’s biggest trade partner, with bilateral trade in goods recorded at $135 billion in the financial year 2023-24. Officials and analysts expect the proposed agreement to significantly deepen economic ties, especially as the global trade environment faces renewed uncertainty. The push for a deal has gathered momentum at a time when the world is witnessing disruptions linked to Washington’s tariff policies, which have affected both India and European economies.
In Davos, von der Leyen also framed the prospective agreement as part of Europe’s broader effort to adapt to shifting geopolitical conditions, arguing that global turbulence should be treated as an opportunity. “It is time to seize this opportunity and build a new independent Europe,” she said, referring to what she called current “geopolitical shocks.”
She said Europe wants to align its commercial partnerships with regions that are driving economic expansion. “Europe wants to do business with the growth centres of today and the economic powerhouses of this century,” she said, adding that the agreement would offer Europe a “first-mover advantage” with “one of the world’s fastest growing and most dynamic continents.”
Von der Leyen also signalled that the EU intends to diversify and strengthen its ties beyond its traditional partners. “From Latin America to the Indo Pacific and far beyond, Europe will always choose the world. And the world is ready to choose Europe,” she said.
The India-EU strategic partnership dates back to 2004, but negotiations for an FTA have moved in fits and starts for nearly two decades. Talks were first launched in 2007, then suspended in 2013 amid differences, including what was described as a “gap in ambition.” Negotiations were eventually relaunched in June 2022, setting the stage for the current push toward a conclusion.
Beyond the trade agreement, the January 27 summit is also expected to yield announcements in other areas. Alongside the FTA, the two sides are likely to unveil a defence framework pact and a broader strategic agenda, reflecting growing cooperation across sectors such as security, energy, digital technologies and supply chains.
The proposed Security and Defence Partnership (SDP), expected to be part of the summit package, is aimed at enhancing defence and security cooperation and bringing greater interoperability between the two sides in the defence domain. The SDP is also expected to open avenues for Indian companies to participate in the EU’s SAFE (Security Action for Europe) programme.
In her Davos address, von der Leyen highlighted the importance of energy and defence in the EU’s policy planning, calling for what she termed an “urgency mindset.” She said Europe is home to “global champions” in areas from wind power to next-generation batteries, and pointed to industries ranging from aerospace to advanced manufacturing. She also referred to defence spending, saying the EU has initiated a surge in investment “up to Euro 800 billion until 2030.”
On relations with the United States, von der Leyen said Europe considers Americans not just allies but “our friends,” while also indicating that the bloc would respond firmly to pressure. “So our response will be unflinching, united and proportional,” she said.
Addressing the Russia-Ukraine war, she said Moscow continued to intensify attacks and called for an end to the conflict. She added that Europe would work closely with the US on efforts to advance a peace process, noting President Donald Trump’s role in pushing talks forward.
India and the EU are also expected to unveil a joint comprehensive strategic vision for 2026-2030, signalling an attempt to place the relationship on a longer-term footing as trade negotiations near the finish line.