Alpha News

“Europe and India Have Made History”: The Trade Agreement That Will Impact 2 Billion People

Published January 27, 2026, 12:27

The European Union and India have reached a historic free trade agreement after more than 20 years of negotiations. The agreement, described by European Commission President Ursula von der Leyen as the “mother of all agreements,” creates a free trade zone covering approximately 2 billion people. According to the EU, the agreement provides for a significant reduction in Indian tariffs on European products, particularly vehicles, wine, and pasta, with an estimated annual tariff reduction of 4 billion euros. Indian Prime Minister Narendra Modi expressed his satisfaction with the agreement, emphasizing that it will offer “numerous opportunities” to both India and the EU. The agreement covers approximately 25% of global GDP and one-third of global trade. Both sides expect an increase in trade as India records strong economic growth and is expected to become the fourth-largest economy in the world. The agreement is considered important in an uncertain geopolitical context, as it is expected to strengthen the competitiveness of both sides against Chinese competition and the consequences of the trade war between the US and China. The agreement was reached after intensive last-minute consultations between negotiators. In 2024, trade between India and the EU amounted to 120 billion euros, an increase of almost 90% in ten years, while trade in services reached 60 billion euros. The agreement is expected to further strengthen these relationships and create new opportunities for businesses and consumers on both sides.