Deep Dive: EU–India — the “mother of all deals” and what it’s really for
- Olga Nesterova
- 2 hours ago
- 4 min read
On January 27, 2026, the EU and India used their 16th Summit in New Delhi to do something they’ve tried — and failed — to do for nearly two decades: close an EU–India Free Trade Agreement (FTA), while simultaneously launching a Security & Defence Partnership and a broader “Towards 2030” strategic agenda that ties trade, tech, mobility, and security into one package.
This isn’t just a trade story. It’s an economic security story — a deliberate effort by two large democracies to reduce vulnerability in a world where trade is increasingly treated as leverage.
What actually happened (and what didn’t)
1) The FTA: concluded — but the hardest part is still ahead
The EU and India announced they have concluded negotiations on a “historic” Free Trade Agreement aimed at reducing or eliminating tariffs on most goods by value and significantly expanding market access. Public figures point to tariff reductions covering over 90% of trade by value, with up to €4 billion per year in tariff savings for EU exporters.
But “concluded” does not mean “in force.”
The agreement must still undergo legal scrubbing, formal signing, and ratification — including EU institutional procedures and national processes in India. This post-announcement phase is where major trade agreements often slow, narrow, or face political resistance.
2) Security & Defence Partnership: the strategic glue
Alongside trade, the Summit delivered the EU–India Security and Defence Partnership, as well as the launch of negotiations on a Security of Information Agreement that would allow the exchange of classified information.
That procedural step matters. It signals intent to move beyond dialogue and into operational cooperation — something previous EU–India frameworks struggled to achieve.
Together, trade, security, technology, and mobility were deliberately packaged into a single strategic architecture.
Why now: leverage in a weaponized world
European Commission President Ursula von der Leyen framed the deal bluntly: trade is increasingly weaponized, and this agreement is meant to reduce strategic dependencies while integrating supply chains.
Translated into strategic terms:
The EU is diversifying risk, seeking alternatives to over-reliance on single suppliers or political choke points.
India is securing market access, capital, and technology without locking itself into one bloc — preserving strategic autonomy while expanding influence.
This is an attempt to turn “strategic partnership” from diplomatic language into institutionalised interdependence.
The FTA’s core bargain: who gets what (on paper)
Likely EU gains
Improved access for high-value exports (automotive, industrial goods, pharmaceuticals, premium consumer products).
Stronger legal predictability for European companies already operating in India (over 6,000 cited).
A platform for long-term industrial expansion as firms pursue China+1 and supply-chain resilience strategies.
Likely Indian gains
Preferential access to EU markets for labour-intensive exports such as textiles, leather, marine products, gems, jewellery, and selected engineering goods.
Strategic positioning as a central trade and manufacturing hub between major economic blocs.
The quiet third pillar: rules and standards
The real test will be regulatory.
The EU traditionally exports standards through trade. India has historically resisted external rule-setting. The FTA’s long-term impact will hinge on whether it becomes:
a genuine market-opening agreement, or
a prolonged contest over sustainability rules, carbon measures, data governance, and industrial standards.
Security partnership: substance vs symbolism
The Security and Defence Partnership spans maritime security, cyber and hybrid threats, counterterrorism, space security, and defence-industrial cooperation.
What looks meaningful
Security of Information Agreement negotiations, enabling classified cooperation.
Maritime cooperation, particularly in the Indo-Pacific, where both sides now explicitly link European and regional security.
What remains aspirational
Defense-industry collaboration without clear procurement pathways, joint production timelines, or binding commitments.
This is where political caution and bureaucracy typically slow progress.
Mobility, skills, and the politics of talent
The Summit also delivered an EU–India framework on mobility, covering students, researchers, highly skilled workers, and seasonal labour, supported by the launch of a European Legal Gateway Office in India — starting with ICT.
This matters because:
For Europe, it’s a competitiveness and workforce lever that intersects with domestic migration politics.
For India, it’s opportunity and access — but with brain-drain sensitivities.
If implemented well, mobility becomes the human infrastructure of the partnership. If mishandled, it becomes a political pressure point.
What’s promised vs. what’s enforceable
Promised
Significant tariff reductions and integrated supply chains.
Predictable, enforceable trade rules.
Operational security cooperation across multiple domains.
Structured mobility pathways and institutional support.
Enforceable only if
The FTA clears ratification without major dilution.
Dispute-settlement mechanisms are robust and usable.
Security cooperation produces operational outcomes — not just annual dialogues.
Domestic political resistance in sensitive sectors is managed on both sides.
The geopolitical signal: multipolar, but structured
The joint language emphasizes:
A UN-centric rules-based order.
Indo-Pacific cooperation.
Reform of global institutions such as the UN Security Council and WTO.
The distinction here is architecture.
The EU and India are not only declaring shared values — they are building institutions, agreements, and procedures designed to endure beyond electoral cycles.
There is also an unspoken audience: Washington and Beijing. The message is diversification, not alignment by dependency.
What to watch next (30–90 days)
Release of the full legal text and ratification timelines
Watch where the real concessions land — autos, spirits, pharmaceuticals, data, sustainability, and dispute settlement.
Climate and CBAM friction
Trade ambitions will collide with Europe’s carbon-border mechanisms and India’s industrial priorities.
Security of Information Agreement progress
Speed here will signal whether the defense partnership becomes operational.
EU–India Trade and Technology Council (Brussels, 2026)
This is where “trustworthy tech” either turns into procurement and standards — or remains rhetoric.
Private-sector follow-through
Business-forum language must translate into investment announcements, projects, and supply-chain commitments.
ONEST Bottom line
This is not just a free-trade deal.
It is a strategic attempt to build shared resilience — economic, technological, and security-oriented — between two democratic poles navigating a fragmented global order.
If ratification and implementation hold, this becomes one of the most consequential alignments of the decade.
If not, it risks joining the long list of “historic milestones” that never fully left the communiqué stage.