Feb 27 (Reuters) – The ​European ‌Union and India ​have agreed ⁠to grant each ‌other Most ‌Favoured ‌Nation ⁠status for ⁠a period of five ​years ‌starting from the date of ‌a trade ​deal entering into force, ⁠a draft of ‌the agreement showed on Friday (February 27, 2026).

Read | The India-EU trade deal is also a strategic turning point 

The FTA, finalised after years of negotiations re-launched in 2022, eliminates or reduces tariffs on 96.6% of EU exports to India by value and 99.5% of Indian exports to the EU by trade value.

A “successful India” is in the world’s interest, said visiting European Union leaders, as officials in New Delhi confirmed that negotiations for the EU-India Free Trade Agreement (FTA) have been concluded.

“Official level negotiations are being concluded and both sides are all set to announce the successful conclusion of FTA talks on January 27,” Commerce Secretary Rajesh Agrawal told reporters on Monday (January 26, 2026). 

Also Read | India to slash tariffs on cars to 40% in trade deal with EU, sources say

Separately, sources in the Commerce Ministry said that negotiations were concluded on Friday (January 23, 2026) and the deal was approved by both sides on Saturday (January 24, 2026). They added that the final text would be readied once it was “scrubbed” by the legal teams of both sides. 

The deal is part of a number of other agreements, including a Security and Defence Partnership, energy cooperation and a mobility agreement expected to be signed during the EU-India summit between Prime Minister Narendra Modi, EU Commission President Ursula von der Leyen and European Council President Antonio Costa on Tuesday (January 27, 2026).

The presence of the EU’s top leadership “underscores the growing strength of the India-European Union partnership and our commitment to shared values”, said Mr. Modi in a post outlooking the agreements.

On Monday (January 26, 2026), all the leaders attended the Republic Day parade, in which EU defence commanders took part for the first time, and EU Presidents were hosted at Rashtrapati Bhawan by President Droupadi Murmu. “A successful India makes the world more stable, prosperous and secure,” Ms. von der Leyen said in a post, adding that the world’s largest democracies Europe and India are committed to shaping “a new global order”.

The leaders witnessed the parade where India’s military hardware and marching contingents, particularly those involved in Operation Sindoor in May 2025 against Pakistan, were showcased. Significantly, much of the hardware that Ms. von der Leyen and Mr. Costa witnessed in the parade was Russian-made or designed and has been sanctioned under various EU sanction packages since Russia’s invasion of Ukraine in February 2022.

“An opportunity to recall the importance of the action of the EU Naval Forces to enhance maritime security and protect the freedom of navigation, in particular in the Indo Pacific,” Mr. Costa said on social media, steering clear of any contentious references to the war in Europe.

Also Read | India and EU are showing a fractured world another way to engage: EU chief Ursula von der Leyen

The EU-India FTA conclusion marks the end of a two-decades-old process, after talks were first launched in 2007. The talks have faltered on a number of occasions, particularly over seemingly irreconcilable issues like market access for “sensitive” European agricultural and dairy items, environmental regulations, investment and immigration. After a freeze on talks between 2014 and 2022, the talks were relaunched with more pragmatic goals, and both sides have reportedly agreed to set aside sectors where they failed to find common ground. Once the FTA is announced on Tuesday, officials will complete the legal scrubbing, and it will be sent to all 27 EU states after being translated, before it is ratified by the European Parliament.

With bilateral trade already crossing $136 billion, the sources also said that this would be “one of the biggest” bilateral deals in the world. Unlike ASEAN countries, the EU acts as a single customs bloc, they explained. The EU has FTAs with eight countries and has signed an FTA with the South American bloc MERCOSUR earlier this month. Both India and the EU are also expected to upgrade their strategic partnership, first concluded in 2004, and upgrade defence cooperation and military engagement in areas including maritime security, cyber security and counter-terrorism.

Ahead of the 16th EU-India Summit in the coming week, European Commission President Ursula von der Leyen kickstarted her four-day visit to India to firm up a series of initiatives to significantly expand ties.

President of the European Council Antonio Costa and Ms. von der Leyen will hold summit talks with Prime Minister Narendra Modi in New Delhi on January 27, 2026 amid increasing global concerns over disruptions caused by the Trump administration’s economic and security policies.

Mr. Costa will land in the national capital on Sunday (January 225, 2026). The two European Union leaders will grace the Republic Day celebrations as the chief guests on January 26.

At the summit, India and the EU are set to announce the conclusion of the much-awaited free trade agreement and firm up a strategic defence partnership pact and a framework for mobility of Indian professionals.

Union Minister Jitin Prasada welcomed Ms. von der Leyen at the airport.

Also Read | India-EU FTA will be the ‘mother of all deals’, says Piyush Goyal

“Charting the next phase of the India-EU Strategic partnership. A warm welcome to the President of the European Commission Ursula von der Leyen @vonderleyen, on her State Visit to India,” External Affairs Ministry spokesperson Randhir Jaiswal said on ‘X’.

“As the world’s two largest democracies, India and the EU share a partnership rooted in mutual trust and shared values,” he added.

The ties between India and the EU have been on an upswing in the last few years.

The EU, as a bloc, is India’s largest trading partner in goods. For the financial year 2024-25, India’s total trade in goods with the EU was worth about $136 billion, with exports around $76 billion and imports at $60 billion.

The European Union is on the cusp of signing a historic trade agreement with India that is being called ‘the mother of all deals’, European Commission President Ursula von der Leyen announced on Tuesday (January 20, 2026), asserting it will create a market for 2 billion people or about one-fourth of the global GDP.

In a special address in Davos at the World Economic Forum Annual Meeting, she said the real would crucially provide a first-mover advantage for Europe with one of the world’s fastest-growing and most dynamic continents.

Follow World Economic Forum 2026 highlights

“Right after Davos, I will travel to India. There is still work to do. But we are on the cusp of a historic trade agreement. Some call it the mother of all deals,” she said.

“Europe wants to do business with the growth centres of today and the economic powerhouses of this century.”

“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.

President of the European Council, Antonio Costa and Ms. von der Leyen will be in India from January 25 to 27 to grace the Republic Day celebrations as chief guests and hold summit talks with Prime Minister Narendra Modi.

The two sides are set to announce the conclusion of negotiations on the much-awaited Free Trade Agreement at the India-EU summit on January 27.

European Commission President said the EU is also working on a new free trade agreement with Australia.

“We are also advancing with the Philippines, Thailand, Malaysia, the UAE — and more,” she added.

She also said Europe will always stand with Ukraine until there is a just and lasting peace.

The European Union is India’s biggest trade partner, with bilateral trade in goods recording $135 billion in the financial year 2023-24. The free trade agreement is expected to significantly enhance trade ties.

The proposed agreement is expected to bring a qualitative change in deepening the overall bilateral ties in a range of sectors, as well as at a time when the world is witnessing trade disruptions in view of Washington’s tariff policy.

Besides firming up the free trade agreement, the two sides are likely to unveil a defence framework pact and a strategic agenda at the summit.

India and the European Union have been strategic partners since 2004.

The ambitious FTA is being firmed up at a time amid increasing concerns over Washington’s trade and tariff policies, which have impacted both India and the 27-nation EU.

India and the EU are also expected to unveil a joint comprehensive strategic vision that will govern their relationship for the period 2026-2030.

The EU and India had first launched negotiations for the free trade agreement in 2007, before the talks were suspended in 2013 due to a gap in ambition. The negotiations. The negotiations were relaunched in June 2022.

The proposed Security and Defence Partnership (SDP) will facilitate deeper defence and security cooperation between the two sides.

The SDP will bring interoperability in the defence domain, and it will open up avenues for Indian firms to participate in the EU’s SAFE (Security Action for Europe) programme. The SAFE is the EU’s Euro 150 billion financial instrument designed to provide financial support to member states to speed up defence readiness.

At the summit, India and the EU are also set to launch the negotiations for a Security of Information Agreement (SOIA). The SOIA is expected to boost industrial defence cooperation between the two sides.

India and the European Union are “very close” to a Bilateral Trade Agreement (BTA), said the government, as both Delhi and Brussels formally announced the EU leadership will travel to India as chief guests for Republic Day and to hold the much-delayed EU-India summit with Prime Minister Narendra Modi. 

The EU-India BTA talks were originally launched in 2007 and then re-launched in 2022, and negotiations were fast-tracked in February 2025 during a visit by European Commission President Ursula Von Der Leyen. 

While the trade deal will be the focus of the visit, both sides are also expected to upgrade their strategic partnership, first announced in 2004, and adopt the new EU-India strategic agenda which includes cooperation in the Indo-Pacific.

‘Crucial partner’

Both leaders will be accorded a State visit by India, and will witness the Republic Day parade on January 26 and the EI-India summit and a business summit on January 27, 2026.

“India is a crucial partner for the EU. Together, we share the capacity and responsibility to protect the rules-based international order. This meeting will be a key opportunity to build on our partnership and drive progress in our cooperation,” António Costa, President of the European Council said in a statement announcing the visit by him and Ms. Von Der Leyen from January 25-27. 

“Trade, security and defence, the clean transition and people to people cooperation will top the agenda of the discussions,” the statement added.

“[The] participation of EU leaders as chief guests at the 77th Republic Day and the 16th India-EU Summit will further deepen the India-EU strategic partnership and advance collaboration in priority areas of mutual interest,” the Ministry of External Affairs said in its release.

Engaged daily

Speaking to the media on Thursday (January 15, 2026), Commerce Secretary Rajesh Agrawal said that the negotiation teams were “very close now” to the conclusion of negotiations.

“We have closed 20 out of 24 chapters completely,” Mr. Agrawal said. “There are a few issues that still require ongoing negotiations and we are engaged virtually on a day-to-day basis on these. We are trying to see if we can meet the timeline when our leaders meet.”

Agricultural hurdles

Mr. Agrawal, however, clarified that this was limited to “sensitive agricultural” products.

“My sense is that, the official that has been quoted, said that sensitive agricultural issues on both sides are off the table, and I agree with her,” Mr. Agrawal said.

The question over agricultural products is significant as the EU’s latest trade deal with South American MERCOSUR countries has run into trouble with France over protests by French farmers this week. While Mr. Costa and Ms. Von Der Leyen will sign the agreement in Paraguay on Saturday (January 17, 2026), the European Parliament will need to ratify it. 

Under political pressure over one agreement, French President Emmanuel Macron, whose government survived two no-confidence motions over the agricultural issue this week, may raise his concerns on the agreement with India when he visits next month for the AI summit in Delhi, officials aware of the negotiations said.

The officials said France would be watching progress of the negotiations on agricultural market access especially for items like wine, dairy products, meat and processed food, which are considered “sensitive” for India.

India and the European Union have “significantly” reduced the gaps in their negotiating positions after three days of trade discussions in Brussels, Commerce and Industry Minister Piyush Goyal said on Tuesday (October 28, 2025) evening.

Mr. Goyal and his EU counterpart, Commissioner Maroš Šefčovič, held discussions to provide a political push to help get the negotiations for an India-EU Free Trade Agreement (FTA) over the finish line.

“The talks have significantly reduced our outstanding issues and allowed us to create the framework that will help deliver a win-win for our economies,” Mr. Goyal said on X, describing the discussions as “intense” but “very productive”.

Mr. Goyal posted a video statement by the two Ministers, in which Mr Šefčovič characterised the talks as having occurred in an atmosphere of “full transparency and trust”. The Commissioner also said that “further work is required”. He said substantial progress had been made in a number of areas and the sides had given specific guidance to their teams on industrial tariffs.

Mr. Šefčovič confirmed that a high-level EU trade delegation led by Director-General Sabine Weyand would be in New Delhi next week to conclude “technical tariff negotiations”. A trade delegation from the European Parliament is in New Delhi this week to better understand the challenges and opportunities presented by the trade negotiations.

Contentious issues

Some of the sticking points have included tariffs around agricultural products, a sensitive area for both sides and particularly for India. Tariffs on European automobiles being sold in India have also been under discussion in recent weeks. Regulatory issues, including the EU’s carbon tax on imports (Carbon Border Adjustment Mechanism), have been contentious issues to work through.

Nevertheless, Prime Minister Narendra Modi and European Commission President Ursula von der Leyen had backed a year-end deadline for the FTA, with the 14th round of talks concluding on October 10 in Brussels. The Hindu had reported on October 11 that talks would continue between formal rounds as the sides race to meet the deadline.

“The negotiations and discussions have laid the foundation for a robust and balanced agreement,” Mr. Goyal said.