Strategic Shift: EU-India landmark deal ends two decades of negotiations
European Commission President Ursula von der Leyen finalized a historic trade and security agreement with India in New Delhi on January 27, 2026. This landmark deal, which spent two decades in negotiation, aims to provide a blueprint for stability in an increasingly fractured global order. The agreement marks a decisive pivot for the European Union as it seeks to diversify its strategic partnerships and reduce economic dependencies.
The EU-India pact is set to deliver immediate benefits to European businesses and citizens. India currently accounts for over €180 billion in annual trade of goods and services with the EU, supporting nearly 800,000 jobs across Europe.
Under the new terms, tariffs will be eliminated or significantly reduced on 90% of trade. Experts project that European exporters will save up to €4 billion annually in duties, with EU exports expected to more than double over the coming years.
Agricultural gains and safeguards
European farmers stand to gain unprecedented access to one of the world's most dynamic consumer markets. Currently, EU agri-food exports to China are ten times higher than those to India; this deal aims to bridge that gap decisively. Notably, Indian tariffs on wine will plummet from 150% to 20%, while duties on olive oil will be scrapped entirely.
Despite these openings, the Commission has ensured that Europe’s "sensitive interests" remain secure. There will be no tariff reductions on beef, poultry, or sugar. Furthermore, all Indian imports must continue to meet the EU's rigorous health, safety, and environmental standards.
A new strategic reality
President von der Leyen framed the agreement as a direct response to the "weaponization" of economic interdependencies seen in 2025. She emphasized that 2026 will be remembered as the year Europe chose strategic openness over isolation.
"Just ten days ago, I was in Paraguay to sign the EU-Mercosur agreement," von der Leyen stated. "Today, in New Delhi, we conclude the largest trade deal ever signed by both the EU and India."
Beyond economics, the partnership introduces the first-ever EU-India Security and Defense Agreement. This pillar focuses on diversifying strategic cooperation and strengthening ties between defense industries, including joint naval exercises to safeguard vital maritime trade routes.
