India and the European Union are set to take a major step forward in their relationship as Prime Minister Narendra Modi hosts the 16th India-EU Summit in New Delhi on Tuesday, 27th January. The meeting brings together European Commission President Ursula von der Leyen and European Council President Antonio Costa, with both sides expected to announce the conclusion of talks on a long-pending Free Trade Agreement (FTA).
India and the European Union are set to formally declare the end of negotiations on a comprehensive free trade agreement at a summit in #NewDelhi today, delivering a long-awaited breakthrough after almost two decades of talks.
— Business Today (@business_today) January 27, 2026
➡️ PM #NarendraModi will host European Commission… pic.twitter.com/RqPDcg5eHn
Commerce Secretary Rajesh Agrawal said the negotiations have been completed and the official announcement will be made during the summit. Officials have described the pact as the “mother of all trade deals,” pointing to its wide scope and long-term impact on both of the world’s largest economies.
Big boost for Trade and Investment
According to government sources, the agreement is balanced and future-oriented. The next step will be legal checks, which are expected to take around six months. After that, the deal will be formally signed.
It is likely to come into force sometime next year. Once implemented, the FTA is expected to boost trade and investment flows and deepen economic ties across sectors.
Prime Minister Modi said the India-EU trade deal fits well with India’s recent agreement with the UK and will give a strong push to manufacturing while also helping the services sector.
Beyond trade: Defence, Climate and Technology
The summit is also focusing on wider cooperation. Talks are covering defence and security, clean energy and climate action, critical technologies, and people-to-people links. A defence framework pact and a broader strategic agenda are also expected to be unveiled.
Earlier in the day, Defence Minister Rajnath Singh met a high-level EU delegation in New Delhi as discussions continued to strengthen defence ties. The EU and India are also exploring ways for Indian participation in European defence initiatives.
Global context and market impact
The agreement comes at a time when Europe is looking to diversify its partnerships amid global trade tensions and changing US policies under President Donald Trump. Some voices in the US have criticised the deal, but European leaders see it as a strong message against protectionist tariffs.
Indian markets reacted positively to the developments. Equity benchmarks were set for a higher opening on optimism around the India-EU trade deal and hopes for easy global trade pressures.
The summit is being seen as a turning point that could reshape India-EU ties across trade, defence, climate action and global cooperation in the coming years.
