India and European Union reach long‑running trade agreement in New Delhi

The European Union and India announced a trade agreement on Jan. 27, 2026, in New Delhi after nearly 20 years of negotiations. European Commission president Ursula von der Leyen and European Council president António Costa joined Prime Minister Narendra Modi as honorary guests for India’s Republic Day to unveil the pact.

The deal must still clear legal scrutiny in Brussels and New Delhi, but leaders described it as far‑reaching. The agreement would cut Indian tariffs on European cars to as low as 10 percent from levels that have been as high as 110 percent, and the EU said India agreed to reduce or eliminate tariffs on 96 percent of European exports.

Most Indian tariffs on machines, chemicals and drugs are set to be removed, while India won concessions on garment tariffs and expanded access for high‑tech service professionals to work in Europe. Some contentious items were omitted: India agreed to lower duties on wine, olive oil and confectionery, but sensitive agricultural products such as beef, poultry, rice and sugar were excluded.

The European bloc said it planned to help fund India’s efforts to reduce carbon emissions to address concerns about Europe’s climate rules. Ms. von der Leyen posted that the accord was “the mother of all trade deals,” and Mr. Modi called it “the biggest free‑trade agreement by India so far,” saying it affected one‑third of global trade.

Key Topics

Business, European Union, India, Republic Day, Narendra Modi, Tariffs