India and EU set to announce landmark trade deal

The European Union and India are set to announce a landmark trade deal after nearly two decades of on-off talks, as both sides aim to deepen ties amid tensions with the US.India's Commerce Secretary Rajesh Agarwal said on Monday that negotiations had been wrapped up and the deal finalised.European Commission President Ursula von der Leyen and European Council President António Luís Santos da Costa are in Delhi, where the announcement is expected.Both India and the EU are seeking to strengthen strategic and trade ties with the rest of the world as they contend with economic and geopolitical pressure from the US. Delhi is grappling with 50% tariffs imposed by President Donald Trump last year amid talks aimed at securing a trade deal between India and the US that are still dragging on.The EU has just emerged from a stressful week after Trump threatened to escalate his trade war with European allies for opposing a US takeover of Greenland before backing off. That larger geopolitical context was evident in recent statements made by leaders.The trade deal will send an "important political message to the world that India and the EU believe more in trade agreements than in tariffs" at a time when protectionism is on the rise and "some countries have decided to increase tariffs", Costa said on Monday without naming the US.Von der Leyen said that Europe and India are "committed to working together to shape a new global order".India and EU set for 'mother of all deals' as Trump's tariff uncertainty loomsVon der Leyen and Costa arrived in Delhi over the weekend and were the chief guests at India's colourful Republic Day celebrations on Monday.On Tuesday, they will meet Modi and attend a bilateral summit, after which the deal is expected to be formally announced.The formal signing is likely to take place only later this year, after the agreement is approved by the European Parliament and the European Council.The deal will expand market access for Indian exports to Europe while easing entry for European investments and goods, such as cars and beverages, into Asia's third-largest economy."This is a perfect example of a partnership between two major economies of the world... This agreement represents 25% of the global GDP and one-third of global trade," Modi said while inaugurating the India Energy Week conference on Tuesday.The EU is India's largest trading partner in goods, with bilateral merchandise trade reaching $136bn (£99.4bn) in 2024-25, nearly doubling over a decade.Talks for a deal between India and the EU started in 2007 but stalled in 2013 over roadblocks in market access and regulatory demands. Discussions were formally restarted in July 2022.The main sticking points were access to India's automobile market, agriculture goods and carbon-linked tariffs - and analysts will be reading the fine print to see what the final agreement says on these issues.Officials from both sides worked hard over the past few days to finalise outstanding chapters of the agreement, aiming to wrap it up before the EU leaders' visit.The agreement - von der Leyen and India's commerce minister Piyush Goyal have described it as the "mother of all trade deals" - comes as pressure grows on Delhi and Brussels to secure alternative markets for exporters.In the past seven months, India signed major trade agreements with the UK, Oman and New Zealand, and a 2024 pact signed with the four-nation European Free Trade Association bloc of Switzerland, Norway, Iceland and Liechtenstein has come into effect. The EU, meanwhile, signed a trade deal with South Asian trade bloc Mercosur earlier this month after 25 years of negotiation.Follow BBC News India on Instagram, YouTube, Twitter and Facebook.