India and the European Union have finalised a landmark free trade agreement, marking a major step in strengthening economic ties between the two regions. Prime Minister Narendra Modi described the pact as a historic milestone after nearly two decades of intermittent negotiations.

Speaking on the development, the Prime Minister said the agreement would open up significant opportunities for both sides. "Yesterday, a big agreement was signed between the European Union and India," PM Modi said. He added, "People around the world are calling this the mother of all deals. This agreement will bring major opportunities for the 1.4 billion people of India and the millions of people in Europe."

The deal will pave the way for India to gradually open its vast domestic market to free trade with the 27-nation European Union, which is India’s largest trading partner. Trade between India and the EU stood at $136.5 billion in the fiscal year ending March 2025, reflecting the scale of economic engagement between the two economies.

According to government sources, the agreement will undergo legal vetting before its formal signing. An official familiar with the process said the implementation timeline is expected to be within a year. "We expect the deal to be implemented within a year," the official said.

For consumers, the free trade agreement is expected to bring visible benefits, including lower prices on select European products such as cars and electronics, along with improved access to services as Indian companies expand their footprint in Europe.

At the same time, sensitive agricultural sectors have been carefully protected. European officials have confirmed that dairy products and sugar are excluded from the agreement. The EU has safeguarded its beef, sugar and rice markets, while India has retained high tariffs on farm and dairy goods to protect the livelihoods of millions of small and marginal farmers.

Despite these safeguards, trade in food and beverage products continues to grow. India’s food and beverage exports to the European Union, valued at around USD 4.2 billion in 2024, are led by coffee, tea, spices, fish and fruits. This indicates that while broad agricultural liberalisation remains limited, specific food and processed product categories may see further expansion.

Reports also indicate that Europe has sought stronger protection for its geographical indications, including wines, cheeses and speciality food products. Overall, the agreement is expected to deepen trade ties, support business expansion, and offer tangible benefits to consumers on both sides.