The conclusion of negotiations of the European Union–India Free Trade Agreement (FTA) symbolises a sea change in how the two sides perceive one another. Until recently, New Delhi focused on strengthening  bilateral ties with individual European countries such as France, Germany, and the United Kingdom, viewing the EU largely as an economic and commercial bloc. Conversely, Brussels tended to  regard India primarily as a vast market for European goods and products.

But the FTA, dubbed the “mother of all deals,” is set to break this conceptual paralysis and redefine the relationship on more strategic terms.

This conceptual redefining is reflected by the first visit by the leaders of the European Union as guests of honour for the Republic Day. In the past New Delhi had invited leaders of individual European countries such as the UK, France, Poland, Greece and Denmark as guests of honour at the Republic Day, but for the first time European Council President António Costa and European Commission President Ursula von der Leyen, representing the EU collectively, were invited to this significant event underpinning the growing closeness, depth and dynamism in India–EU relations.

“Today is a historic moment. We are opening a new chapter in our relations – on trade, on security, on people to people ties,” stressed Costa as a press conference in New Delhi Tuesday after the historical deal was announced  .

"Today, India has concluded the largest Free Trade Agreement in its history. Today is January 27 and it is a happy coincidence that, on this day, India is signing this FTA with 27 countries of the European Union. This is not just a trade agreement... it is a new blueprint for shared prosperity,"  Indian Prime Minister Narendra Modi told the joint press conference.

Security And Defense Partnership

In response to the erratic, unilateral, cowboyish and destabilizing policies of U.S. President Donald Trump, Brussels and New Delhi looked for alternative global partners—and found that their most viable option was each other. The historic deal reflects their joint commitment and shared interest in shaping a resilient multipolar  global order that underpins peace and stability, economic growth and sustainable development.

Further, the 27-member European bloc and India signed a Security and Defence Partnership on the margins of the EU-India Summit.

“Today, the world's two largest economies and democracies launch their first ever security and defence partnership. This is a landmark departure. And a trust-based platform for cooperation on the strategic issues that matter most. In doing so, we will help to build each other's resilience. Europe and India have a long history of cooperation in the defence industry. Now, we will enhance this teamwork even further, “ von der Leyen told the same press conference.

 “It will expand our cooperation in areas such as maritime security, counterterrorism, and cyber-defence. The EU and India see the world changing in similar ways and are responding together. Security is now a core part of our relationship, stressed EU foreign policy chief Kaja Kallas.

EU and Indian leaders underscored the importance of close cooperation on regional and global security matters, acknowledging that the security and prosperity of Europe and the Indo‑Pacific are interconnected.   The two sides reiterated their shared commitment to promoting a free, open, peaceful and prosperous Indo‑Pacific.

Shape New Global Order

The new EU-India partnership is bound to shape the new global order and impact developments in Asia,  Europe, Middle East and Africa.  Analysts opine that major geopolitical disruptions, including the Russia–Ukraine war, China’s hegemonic policies and economic pressures are driving the need for substantial policy orientations to build a resilient and sustainable European economy. At the same time, rapid shifts in global trade—shaped by geopolitical tensions, regulatory change, and technological advances required new policy strategies for both Europe and India.

In a joint statement, EU and India unequivocally and strongly condemned terrorism and violent extremism, in all its forms and manifestations including cross‑border terrorism. They called for decisive and concerted international efforts to combat terrorism in a comprehensive and sustained manner and in accordance with international law.

Over Ukraine, a point of contention previously, the two sides merely expressed concern over the ongoing war which continues to cause immense human suffering and carries global consequences. Both sides will continue to support efforts towards the achievement of a comprehensive, just and lasting peace in Ukraine through dialogue and diplomacy.

Agriculture Kept Out Of Purview

The FTA deal says it will bolster the "untapped" potential of their combined markets but did not include politically sensitive sectors such as agriculture which has been kept out of its purview in deference to the strong concerns of Indian farmers.

According to EU trade Commissioner Marcos Sefcovic, under the agreement, the EU aims to double goods exports to India by 2032 by cutting tariffs on approximately 96% of EU exports to the country, saving around 4 billion euro a year in duties. At its full potential, the deal creates a market of 2 billion people.

According to a report on Euronews TV, Europe’s carmakers emerge as clear winners with Indian customs duties gradually reduced from 110% to 10% if the terms are applied. Tariffs in sectors including machinery, chemicals and pharmaceuticals will also be almost entirely eliminated.

Wine and spirits - key exports for countries like France, Italy and Spain - will see duties reduced from 150% to around 20 to 30%. Olive oil duties will be cut to zero from 40%.

Talks between the EU and India first began in 2007 but quickly ran into trouble over differences on a number of issues, such as agriculture, car taxes, etc. Negotiations were relaunched in 2022 and talks intensified last year due to the impact on their economies from Trump's tariff wars and threats.

However, before the deal can be implemented, the European Council and the European Parliament will have to ratify it, which can become an arduous and lengthy process. The EU hopes that this process will be completed by early 2027.

In line with the collaborative spirit, the two sides also exchanged other documents during the summit like the Comprehensive  Framework on Cooperation on Mobility, Disaster Risk Management, and Green Hydrogen Task Force.

Meanwhile, Costa, who is from Portugal and also holds an Overseas Citizen of India (OCI) card as his ancestors hail from Goa, declared himself "proud" of his Indian roots and said the India-EU trade deal reflects the "shared vision of India and Europe.

(The author is an Indian journalist who is a long time resident in Brussels and has been covering European and EU affairs for the past 40 years. Views expressed are personal . He can be reached at nawab_khan@hotmail.com X: @NawabKhan10)