India and the EU have reached a free trade agreement that accounts for 25 per cent of global GDP and one-third of global trade, Prime Minister Narendra Modi announced on Tuesday even as the European countries’ bloc explored ways to integrate its defence supply chains under a broader goal of deepening bilateral strategic ties with Delhi.
Modi discussed how the trade agreement is being called the "mother of all deals”, and said the pact has brought a lot of opportunities for 140 crore Indians and crores of Europeans.
Addressing the Indian Energy Week virtually, Prime Minister Modi congratulated all on the EU-India trade deal and said: "I am informing you about a big development...yesterday a very big agreement has been reached between India and the European Union.
"This is an excellent example of coordination between two economies of the world. This agreement represents 25 per cent of the global GDP and one third of the global trade," he said.
He suggested that the free trade agreement with the EU will complement agreements with Britain and the European Free Trade Association (EFTA).
This will strengthen both global trade and the supply chain.
He congratulated the youth and all colleagues associated with sectors such as textiles, gems and jewellery, leather, and shoes.
The agreement will prove very helpful, he stated, adding that it will not only boost manufacturing in India but will also further expand the services sector.
"This free trade agreement will strengthen confidence in India for every business and every investor in the world. India is working extensively on global partnerships in all sectors," he said.
Bilateral trade between India and the EU surpassed US$190 billion in 2024-25. India exported $75.9 billion in goods and $30 billion in services to the EU, while the EU exported $60.7 billion in goods and $23 billion in services to India.
Prime Minister Narendra Modi hosted European Commission President Ursula von der Leyen and European Council President Antonio Costa for summit talks against the backdrop of new fissures in ties between Europe and the US.
Ahead of the summit, Costa and von der Leyen visited Rajghat and paid tributes to Mahatma Gandhi.
The two EU leaders graced the 77th Republic Day celebrations at the Kartavya Path as chief guests on Monday.
"A successful India makes the world more stable, prosperous and secure. And we all benefit," Von der Leyen said ahead of the summit.
The world has been witnessing new geopolitical upheavals triggered largely by Washington's policies on trade and security.
Defence supply chain next?
The defence supply chain issue figured prominently at a meeting defence minister Rajnath Singh held with the EU’s chief of foreign and security affairs, Kaja Kallas.
"Discussed a range of bilateral security and defence issues including opportunities for integrating supply chains for building trusted defence ecosystems and future-ready capabilities," Singh wrote on X (formerly Twitter).
"Looking forward to greater cooperation between India and the EU countries," he said.
The meeting took place ahead of the India-EU summit talks.
