The European Union has moved a long-stalled free trade agreement with India to the brink of completion, with the European Commission formally asking the Council of the EU to approve the signing and conclusion of a deal that would scrap tariffs on 96% of goods traded between the two economies. The agreement, if finalized, would rank among the most consequential trade pacts either side has struck in years, binding together a bloc of 27 nations and the world's most populous country in a relationship that has taken more than a decade to negotiate.

According to the Commission, the deal is projected to generate roughly €4 billion in annual savings for businesses on both sides once fully implemented, primarily through the removal of import duties that have long made EU goods more expensive in India and vice versa. The request now goes to the Council, the body representing EU member states, whose approval is required before the agreement can be formally signed and enter into force.

A Decade in the Making

Talks between Brussels and New Delhi over a comprehensive trade agreement first began in 2007, only to collapse in 2013 amid disagreements over market access, data protection standards, and tariffs on politically sensitive sectors such as automobiles, wine, and spirits. Negotiations were revived in 2022 as both sides sought to diversify trade relationships in the wake of the pandemic and geopolitical tensions surrounding Russia's invasion of Ukraine, which pushed the EU to reduce its economic dependence on China and reassess its global supply chains.

India, for its part, has been pursuing a broader strategy of striking trade agreements with major economies, including the United Kingdom, to accelerate its integration into global manufacturing and export networks as it seeks to position itself as an alternative to China for foreign investment.

What the Deal Covers

The centerpiece of the agreement is the elimination of tariffs on the overwhelming majority of goods traded between the two blocs, covering everything from machinery and pharmaceuticals to textiles and agricultural products. The EU is one of India's largest trading partners, and Indian exporters have long faced duties that put them at a disadvantage compared with competitors from countries that already enjoy preferential access to European markets.

For European companies, the removal of Indian tariffs, which have historically been among the highest in major economies for certain goods, including automobiles and wine, could open a market of more than 1.4 billion consumers. European exporters of machinery, chemicals, and processed foods stand to benefit significantly, as do Indian exporters of textiles, leather goods, and pharmaceuticals seeking easier entry into European markets.

The agreement would eliminate tariffs on 96% of goods traded between the two blocs, with the European Commission estimating annual savings of roughly €4 billion for businesses.

Historical Weight of the Moment

The push for closer trade ties fits into a longer pattern of India gradually opening itself to global commerce after decades of protectionist policy. India's trade liberalization since the early 1990s has already reshaped its economic relationships with neighbors and major powers alike, though tariff barriers with Europe have remained comparatively high even as India expanded trade with other partners.

The EU, meanwhile, has increasingly looked to trade agreements as tools of geopolitical strategy as much as economic policy. Much as the bloc's internal market integration was designed in earlier decades to bind member states together and project collective economic strength, its external trade agreements, including this one with India, are increasingly framed by Brussels as a way to build alliances and supply chain resilience outside its borders, particularly as tensions with China and uncertainty around United States trade policy persist.

What Comes Next

With the Commission's request now before the Council, EU member states must weigh in before the agreement can be signed. Trade deals of this scale typically also require ratification processes that can extend the timeline even after political agreement is reached, and sensitive sectors on both sides, including European automakers and Indian dairy and agricultural producers, are likely to face continued scrutiny as the deal moves toward implementation.

Still, the Commission's formal request marks the clearest signal yet that both sides view the negotiations as essentially complete on substance, with the remaining steps being procedural rather than a return to the bargaining table. If approved, the agreement would represent a significant expansion of economic ties between two of the world's largest markets, and a notable win for both Brussels and New Delhi as each looks to demonstrate the strength of its trade diplomacy on the global stage.