The deal between Brussels and Delhi will open up trade for over 2 billion people.
A landmark trade deal between the European Union and India amid trade tensions with the U.S. has been hailed by an association of European manufacturers as a move “against the law of the jungle.” The Mechanical Engineering Industry Association , which represents roughly 3,600 German and European mechanical and plant engineering companies, told Newsweek Tuesday that the free trade deal between the EU and Delhi, “brings much-needed oxygen to a world increasingly dominated by trade conflicts.
” India's Prime Minister Narendra Modi with European Commission President Ursula von der Leyen and European Council President Antonio Costa in New Delhi on January 27, 2026. Photo by Sajjad HUSSAIN / AFP via Getty Images. Why It Matters The deal announced Tuesday will allow the free trade between the bloc of 27 European states and the world’s most populous country, expanding market access at a time when President Donald Trump has waged a global trade war. The deal has been years in the making but the timing of its approval is significant given Trump’s latest tariff threats against European countries opposing his push to acquire Greenland. While Trump has dropped this threat, he announced on Monday that he would raise levies to 25 percent against South Korea, after accusing Seoul of “not living up“ to a trade deal reached last year. Canadian Prime Minister Mark Carney told the International Economic Forum in Davos that middle powers should work together to counter the rise of hard power, and the trade deal between India and the EU could be considered a step toward that idea. What To Know European Commission President Ursula von der Leyen posted on X that the bloc had agreed to the “mother of all deals” with India following her meeting with the country’s prime minister Narendra Modi, in Delhi. Talks had started in 2007, stalled in 2013 and were restarted in 2022. The deal will allow free trade between both trading partners which comprise of 25 percent of global GDP and a market of 2 billion people. The European Commission, the EU’s executive arm, said the deal would end tariffs on most exports of chemicals, machinery and electrical equipment, aircraft and spacecraft, following phased reductions. Indian duties on motor vehicles will be cut to 10 percent from a high of 110 percent under an annual quota of 250,000 vehicles. Thilo Brodtmann, executive director of VDMA, which represents 3,600 German and European mechanical and plant engineering companies said that the reduction of tariffs, which average 7.5 percent, and technical barriers to trade will give European manufacturers a much-needed competitive boost. He said in a statement that export-oriented mechanical and plant engineering “needs rule-based trade like it needs air to breathe.“ “The free trade agreement between India and the EU brings much-needed oxygen to a world increasingly dominated by trade conflicts,“ said the statement which did not mention the U.S. but comes as both India and the EU face pressure from Trump who hit Delhi with 50 percent tariffs and talks continue over a deal. On Monday, Trump announced he is raising tariffs on South Korean imports to 25 percent prompting Seoul to call for urgent talks over the issue which impacts its sale of a range of products including automobiles, lumber, pharmaceuticals. What People Are Saying European Commission President Ursula von der Leyen posted on X on Tuesday: “We have concluded the mother of all deals.“ Indian Prime Minister Narendra Modi: “This is a historic agreement...it will make access to European markets easier for India's farmers and small business. It will also boost manufacturing and services sectors.” Thilo Brodtmann, executive director of VDMA: “The EU has delivered. With this agreement, Europe is sending a clear signal in favor of rules-based trade and against the law of the jungle. Today is a day of celebration for export-oriented mechanical engineering.” What Happens Next The formal signing will likely to take place later this year, once the deal is approved by the European Parliament and the European Council, the BBC reported. India and the EU are also in separate talks on security and defense cooperation, and climate action.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Trump expected to share new details of 'Trump accounts' savings program this weekTrump accounts program offers government-funded investment accounts for newborns with $1,000 seed money. Program expected to launch by mid-2026 for families.
Read more »
India fetes EU at Republic Day parade ahead of trade dealThe high-profile celebrations underscored deepening EU-India ties as both sides move to finalise a trade and security partnership shaped by shifting global economic and geopolitical pressures.
Read more »
India, EU seal landmark free trade deal after 20 years of talksThe agreement comes as both New Delhi and Brussels step up efforts to hedge against global trade uncertainty.
Read more »
USD/INR remains stronger despite India–EU free trade agreementThe USD/INR pair continues its winning streak that began on January 15, maintaining its position near an all-time high of 91.96, reached on January 23.
Read more »
Trump Administration Summit Focuses on Financial Benefits of Trump Accounts for Young AmericansThe Trump administration is holding a summit in Washington, DC, to discuss the financial benefits of the proposed Trump Accounts, a new tax-advantaged retirement account for young Americans. The summit, hosted by the Treasury Department, will feature President Trump, Treasury Secretary Scott Bessent, and other officials, with a focus on strengthening financial security and economic opportunity. The program, for children born between 2025 and 2028, will provide an initial contribution from the Treasury and allow for additional contributions from parents and employers.
Read more »
‘Sorry, Trump’: Ilhan Omar fires back after Trump targets her in Truth Social postFox News Channel offers its audiences in-depth news reporting, along with opinion and analysis encompassing the principles of free people, free markets and diversity of thought, as an alternative to the left-of-center offerings of the news marketplace.
Read more »