After nearly two decades of negotiations, India and the European Union have concluded a landmark free trade agreement, creating one of the largest trade blocs in the world.

The agreement eliminates or significantly reduces tariffs on 96.6 percent of EU exports to India, including automobiles, wine, spirits, machinery, and pharmaceuticals. In return, the EU will open 99.5 percent of its market to Indian goods, providing major boosts to India’s textile, garment, pharmaceutical, leather, and chemical sectors.

European Commission President Ursula von der Leyen and India’s Trade Minister Piyush Goyal described the pact as a strategic response to rising global trade uncertainty. The deal arrives as the U.S. administration increases tariff threats against multiple trading partners, including India.

For India, the agreement diversifies trade dependencies and restores market access lost when EU trade preferences were withdrawn in 2023. For Europe, it reduces reliance on Chinese supply chains and secures access to one of the world’s fastest-growing major economies.

Combined, India and the EU represent nearly two billion people and roughly a quarter of global GDP, underscoring the agreement’s global significance.