EU, India Sign ‘Mother Of All Deals’ Free Trade Agreement In Rebuff To Trump: What’s In It

The newly signed India-European Union free trade agreement is being hailed as “the mother of all deals” – as it follows nearly two decades of intermittent negotiations, also after President Trump slapped India with 50% tariffs last year in part for continuing to buy Russian oil, and as Washington pressures Europe and Denmark particularly over Greenland.

The deal is expected to double EU goods exports to India by 2032, by eliminating or at least sharply reducing tariffs on 96.6% of the value of EU exports. “This agreement will bring major opportunities for the people of India and Europe,” Prime Minister Narendra Modi said Tuesday. And European Commission President President Ursula von der Leyen, who was in New Delhi on Monday as an honorary guest for India’s Republic Day and its annual military parade, said that “Europe and India are making history today.”

She further wrote on X: “We have created a free-trade zone of two billion people, with both sides set to benefit. We will grow our strategic relationship to be even stronger.” European Council President Antonio Costa was also present.

Indeed in terms of geographic scope, the agreement spans a population of roughly 2 billion people (between India and the 27-member bloc) and creates a combined market valued at nearly $27 trillion, accounting for about 25% of global GDP, according to European sources.

What’s in it? Below are the main highlights:

• Will phase out tariffs on most EU exports of chemicals, machinery, and electrical equipment, along with aircraft and spacecraft, following staged reductions.

• Tariffs on motor vehicles, currently as high as 110%, will be slashed to 10% under a quota of 250,000 vehicles – a cap that is six times larger than the 37,000-unit quota India granted the UK under a deal signed last July.

• India will also lower tariffs on EU wine, beer, and olive oil.

• Brussels said the deal is expected to boost investment flows, improve access to EU markets, and deepen supply-chain integration between the two sides.

• New Delhi said nearly all Indian exports will receive “preferential access” to the EU, with textiles, leather goods, marine products, handicrafts, gems, and jewelery seeing tariffs reduced or eliminated.

• Commodities such as tea, coffee, spices, and processed foods will also benefit, though India said it has “prudently safeguarded sensitive sectors,” including dairy, cereals, poultry, soy meal, and certain fruits and vegetables, to balance export growth with domestic priorities.

• India and the EU also agreed to a mobility framework that will temporarily ease restrictions on professional travel between the two markets.

While Brussels and New Delhi are busy celebrating, all eyes are on how the Trump White House will react, given the agreement is widely viewed as strategic hedge against Trump’s unpredictable and volatile trade policies and tariff threats, often unleashed in late night Truth Social posts.

The European Right might have something to say about a controversial aspect which is already being underreported…

🚨BREAKING: EU SIGNS IMMIGRATION DEAL WITH INDIA

This will allow potentially MILLIONS of Indians to come and work/study in Europe

This will be a complete disaster

Once they come, most won’t leave

Ursula Von Der Leyen has betrayed the European people pic.twitter.com/Thnl85QtOw

— Basil the Great (@BasilTheGreat) January 27, 2026

And more criticism and details on migration which in reality is only going to be one-way…

Europe is replacing US tech companies with nonsense built by Indians.

Von der Leyen is in India RIGHT NOW securing deals to bring millions of Indian workers and students to Europe.

It’s called the Common Agenda on Migration and Mobility and it is 100% about Indian migration. pic.twitter.com/1rkGbekWsm

— White Papers Policy Institute (@WhitePapersPol) January 25, 2026

On Sunday Treasury Secretary Scott Bessent gave the world a preview on what Trump is likely thinking as the EU forged ahead. “The US has made much bigger sacrifices than Europeans have. We have put 25% tariffs on India for buying Russian oil. Guess what happened last week? The Europeans signed a trade deal with India,” Bessent told ABC News.