Free trade pact with India by year-end: EU Chief Ursula von der Leyen

New Delhi: European Commission president Ursula von der Leyen announced that the India-EU Free Trade Agreement (FTA) will be inked by the end of 2026 and assured that the "mother of all deals" will be operationalised at record speed.

Speaking at the European Round Table for Industry in Gothenburg, Sweden, on Sunday alongside Prime Minister Narendra Modi and Swedish PM Ulf Kristersson, she said that the agreement heralds a transformative new era for global commerce. "We are committed to signing the agreement by the end of the year and making it fully operational at record speed," von der Leyen said at a joint press briefing. "Our EU-India agreement-the mother of all deals!-heralds a new era in our relations. We're working hard to have it applied this year to fast-forward its benefits for our people and businesses."

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The framework for the trade pact was concluded in January during the India-EU Summit. The agreement will lead to sweeping tariff cuts on more than 90 per cent of goods, potentially eliminating billions of euros in annual duties and granting European companies wide-ranging access to India's fast-growing economy.

Von der Leyen indicated that a comprehensive bilateral investment agreement is already being fast-tracked as the next crucial phase of the partnership. "An investment agreement is the missing piece of the puzzle in our reinforced economic cooperation, especially in a world where supply chains are being reshaped and economic security challenges are as never before. One can say the trade agreement opened the door. An investment agreement walks us through this door," she said.

Prime Minister Modi welcomed the progress on the trade deal, saying it will create big opportunities for businesses and innovation.

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"In today's tense global situation, close cooperation between democracies like India and Sweden, and the broader European Union, holds special significance," he said, emphasising that India and Europe must work together to build resilient and diversified supply chains.

Amid India's pivot to Europe aimed at de-risking from unpredictable policies and weaponisation of supply chains, Sweden and Norway have significance for India. While Sweden is a manufacturing powerhouse increasing its investments in India, Norway is playing a critical role in energy supplies, maritime infrastructure and renewables.