Von Der Leyen says EU set to sign ‘mother of all deals’ with India on trade

The EU was on the cusp of signing a historic trade agreement with India, European Commission president Ursula von der Leyen said, indicating long-running talks had been completed.

Speaking at the World Economic Forum in Davos, she said the agreement would create a market for 2 billion people.

“Right after Davos, I’ll travel to India. There’s still work to do. But we are on the cusp of a historic trade agreement. Some call it the mother of all deals," Ms Von der Leyen said on Tuesday.

Spain’s foreign minister Jose Manuel ⁠Albares also expressed optimism during a visit to Delhi on Wednesday morning, telling reporters that a deal is likely to be concluded in the coming days.

India and the EU started negotiations on a free trade agreement in 2007, but shelved the talks in 2013. They returned to the table in 2022, only for the discussions to grind to a halt over issues of market access for products like cars and alcoholic beverages.

Ms Von der Leyen is set to land in India for a three-day visit on 25 January. She and European Council president Antonio Luís Santos da Costa will attend the annual Republic Day celebrations in Delhi on 26 January as its chief guests.

Ms Von der Leyen will then lead India-EU summit talks with prime minister Narendra Modi, where they are expected to announce the conclusion of negotiations on the much-awaited trade agreement.

The EU is India’s largest trading partner, ahead of the US and China. In 2023-24, their trade was worth more than $130bn, an increase of almost 90 per cent over the past decade. Nearly 6,000 European companies operate in India.

The trade deal will remove barriers and help European companies export more to India and open markets on both sides. If signed, it will be India’s largest free trade agreement in terms of economic scale and regulatory coverage, giving it preferential access to the 27 EU member states through a single framework.

The EU is keen to expand its relationships in the Indo-Pacific region as the Donald Trump administration threatens to impose punitive levies on European nations for opposing his wish to annex Greenland.

EU leaders have condemned Mr Trump’s threats as economic coercion and said that they were preparing potential retaliatory measures, such as tariffs and activation of the bloc’s anti-coercion instrument.

For India, the trade talks with the EU have assumed greater significance since the US imposed a 25 per cent reciprocal tariff on the South Asian country and an additional levy of 25 per cent for buying Russian oil.

India and the US are struggling to finalise their own trade agreement, with both sides describing themselves as "very near" or "close" at various points without reaching a conclusion.