India EU have concluded a landmark free trade agreement, dubbed the “mother of all deals,” amid heightened global trade tensions. US officials offered mixed but pointed responses, with one praising India’s gains and another expressing disappointment over Europe’s priorities.
India and the European Union finalised their free trade agreement on Tuesday, 27 January 2026, in New Delhi. Prime Minister Narendra Modi hosted European Commission President Ursula von der Leyen and European Council President António Costa for the signing. The India EU trade deal creates a vast economic zone covering two billion people and aims to counter uncertainties from US tariffs.
This India EU trade deal carries weight for South Asia. It provides India deeper access to the EU market, potentially pressuring regional competitors in exports like textiles and pharmaceuticals. For Pakistan and other neighbours, it signals shifting trade alignments and opportunities to pursue diversified partnerships amid US policy volatility.
Key Details of India EU Trade Deal
The pact reduces or eliminates tariffs on most goods. The EU gains improved access for 96.6 per cent of its exports to India. India secures preferential entry for over 99 per cent of its shipments to the EU, focusing on labour-intensive industries.
Officials expect the deal to double EU exports to India by 2032. Indian Commerce Minister Piyush Goyal highlighted benefits for small enterprises and job creation. Mobility provisions for Indian workers form part of the agreement.
Talks, relaunched in 2022 after earlier stalls, accelerated recently. The 14th round took place in October 2025. Full implementation awaits ratification, likely in 2026 or early 2027.
Trump Reaction India EU Deal Highlights Mixed Views
US Trade Representative Jamieson Greer provided the initial Washington response. In a Fox Business interview on 27 January 2026, he stated India comes out on top. Greer noted greater market access in Europe and possible immigration advantages for India. He added India would enjoy a heyday with low-cost labour advantages.
Greer framed the pact partly as a reaction to US policies emphasising domestic production and market access fees.
US Reaction India EU Deal Shows Disappointment
US Treasury Secretary Scott Bessent voiced stronger criticism. In a CNBC interview on 28 January 2026, he called the deal very disappointing. Bessent accused Europe of prioritising trade over pressuring India on Russian oil imports. He pointed to irony in Europeans purchasing refined products from Indian refineries using Russian crude, financing conflict indirectly.
Bessent referenced US tariffs on India for Russian oil purchases. Imposed at 25 per cent in August 2025, these raised totals to 50 per cent on certain goods. India’s Russian oil share dropped from peaks of 18-19 per cent, he noted.
Broader US reaction India EU deal reflects ongoing frictions. The agreement emerges against US tariff threats, including recent ones on EU nations over unrelated issues like Greenland.
India EU FTA Trump Policies Accelerated Talks
Experts attribute faster progress to US trade pressures. Michael Kugelman from the Atlantic Council described Trump as providing strong impetus. Both sides faced unexpected tariffs, prompting diversification.
The deal covers one-third of global trade and significant GDP share. Von der Leyen described it as the mother of all trade deals on social media. Modi termed it India’s largest FTA.
Background on India EU Trade Relations
Negotiations started in 2007 but paused in 2013 over sticking points. Relaunch in 2022 responded to changing global dynamics.
Bilateral trade volumes grew steadily. Indian exports feature textiles, pharmaceuticals, and engineering goods. EU supplies machinery, chemicals, and vehicles.
The agreement includes investment protections and ongoing geographical indications talks. A trade and technology council launches in 2026.
EU commits €500 million for India’s green initiatives.
What’s Next for India EU Trade Deal
Ratification processes follow in respective systems. Entry into force targets early 2027.
Ministerial follow-up occurs in Brussels in 2026. Business engagement deepens implementation.
The India EU trade deal navigates current uncertainties. It strengthens bilateral ties and sets examples for resilient global partnerships.
In conclusion, the India EU trade deal advances economic cooperation while drawing notable reactions from Washington, underscoring its geopolitical context.
Published in SouthAsianDesk, January 29th, 2026
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