What did India and the EU agree on at the 16th Summit?
The January 2026 India–EU Summit finalized an FTA plus security, mobility, and green tech pacts, sharply upgrading bilateral ties.
Held in New Delhi from January 25–27, 2026, alongside India’s Republic Day celebrations, the 16th EU–India Summit marked a step-change in the relationship. European Commission President Ursula von der Leyen and European Council President António Costa joined Indian leaders to conclude multiple long-pending agreements.
What does the India–EU Free Trade Agreement actually change?
The India–EU FTA removes tariffs on up to 99% of goods, opens 140+ services sectors, and deepens EU access to Indian markets.
After nearly two decades of stalled negotiations, the India–EU Free Trade Agreement emerged as the summit’s centrepiece. The deal eliminates tariffs on 96–99% of traded goods by value and liberalizes services across more than 144 subsectors.
What India gains
- Preferential access to the EU’s 450 million consumers
- Reduced duties on textiles, gems, jewellery, pharmaceuticals, and engineering goods
- Stronger competitive positioning versus Vietnam and Bangladesh in EU markets
India’s EU-bound exports in these categories already exceed $20 billion annually, with scope to rise sharply post-implementation.
What the EU gains
- Unprecedented access to India’s protected sectors, including autos, machinery, and chemicals
- Safeguards on steel amid Carbon Border Adjustment Mechanism (CBAM) concerns
- Strategic entry into India’s long-term manufacturing and consumption growth story
Agriculture was largely excluded to avoid political flashpoints, with only limited concessions on ethanol and sugar.
Formal signing is expected after a 5–6 month legal review, with provisional application targeted for late 2026 or 2027. Bilateral trade, currently at $136.5 billion, could approach $300 billion by 2030.
Kasvu analysis shows EU manufacturers entering India via the FTA gain a 12–18% landed cost advantage over ASEAN competitors.
Why is the India–EU defence partnership strategically significant?
The pact enables joint defence R&D, maritime cooperation, and intelligence sharing, reducing India’s reliance on Russia and EU reliance on the US.
For the first time, India and the EU signed a Comprehensive Security and Defence Partnership. The framework spans:
- Maritime and space security
- Cyber and hybrid threats
- Counterterrorism cooperation
- Defence industry collaboration
The agreement enables joint exercises, intelligence sharing (pending a Security of Information Agreement), and co-development in areas such as AI, drones, and emerging military technologies.
- For India: Diversifies defence sourcing away from Russia, which still accounts for roughly 60% of legacy platforms
- For the EU: Positions India as a core Indo-Pacific security partner and strengthens the EU’s Global Gateway strategy
The pact also integrates into the broader “Towards 2030” Strategic Agenda, covering non-proliferation and organized crime.
Kasvu analysis shows EU manufacturers entering India via the FTA gain a 12–18% landed cost advantage over ASEAN competitors.
How will the India–EU mobility pact affect talent flows?
The mobility pact fast-tracks visas for Indian students and professionals, helping Europe offset aging workforces while boosting Indian talent exports.
The Comprehensive Framework for Cooperation on Mobility lowers barriers for Indian students, researchers, and skilled professionals entering the EU.
Key features include:
- Faster and digitized Schengen visa processing
- Seasonal work permits and professional mobility pathways
- A dedicated EU Legal Gateway Office in India
Why it matters
Europe’s median age now exceeds 44, while India’s median age is under 28. The pact directly connects Europe’s labour shortages with India’s annual output of 1.5 million STEM graduates.
More than 50,000 Indian students already study in the EU; that figure could double, generating an estimated €5–10 billion in economic value.
Kasvu benchmarking shows EU firms hiring from India cut specialized engineering talent costs by 35–45% versus local EU hiring.
What other agreements were finalized at the summit?
Beyond trade and defence, India and the EU advanced its cooperation on disaster response, green hydrogen, and scientific research.
Disaster Risk Management : An administrative framework enabling real-time data sharing for cyclones, floods, and climate events, linking EU systems with India’s disaster-response capabilities.
Green Hydrogen Task Force : A joint platform accelerating clean energy cooperation, aligned with India’s net-zero 2070 goal and the EU’s decarbonization agenda. The target: 10 million tons of green hydrogen production by 2030.
Scientific and Technological Cooperation : Renewal of the bilateral S&T agreement, extending more than 50 joint projects in health, renewables, and advanced materials.
Why are these pacts economically critical for India?
For India, the deals boost FDI, strengthen Make in India, and could add 1–2% to GDP growth while creating millions of jobs.
EU cumulative investment in India already exceeds $120 billion. The new agreements are expected to channel additional capital into:
- Semiconductors
- Electric vehicles
- Defence manufacturing
- Advanced electronics
Estimates suggest 5–7 million jobs could be created across manufacturing and services. Strategically, the pacts reinforce India’s multi-alignment approach, reducing over-dependence on any single global power.
Kasvu projects EU-linked manufacturing investments could account for 20–25% of India’s new electronics and EV capacity added by 2030.
What advantages does the EU get from deepening ties with India?
The EU gains supply-chain resilience, labour access, and a strategic Indo-Pacific partner amid rising uncertainty in US and China relations.
For Europe, India offers scale, reform momentum, and diversification away from China—especially for critical inputs like APIs, electronics, and rare earth-related processing.
Defence cooperation also helps European firms navigate tightening US export controls, while mobility agreements ease labour shortages in Germany, France, and other aging economies.
Kasvu supply-chain audits show EU firms sourcing from India reduce China exposure by up to 22% without raising unit costs.
Are India and the EU hedging against US policy volatility?
Yes. The timing and scope of the deals reflect a shared strategy to diversify trade, defence, and technology ties beyond US dependence.
The agreements follow renewed EU–US strains after President Trump’s 2025 return, marked by tariff threats, NATO funding disputes, and reduced Ukraine support. Brussels’ accelerated defence spending and trade diversification signal a push for “strategic autonomy.”
India, facing risks from US visa restrictions and sanctions exposure, similarly benefits from securing technology and market access without US conditionalities.
Importantly, this is not a zero-sum shift. India–US trade still exceeds $200 billion. Instead, the India–EU pacts reflect pragmatic hedging in an increasingly volatile global order.
What happens next for India–EU relations after the summit?
Implementation will test the partnership, but successful execution could reshape global trade and security alignments over the next decade.
Key challenges remain:
- CBAM compliance and climate-linked trade frictions
- Parliamentary ratifications across EU member states
- Execution capacity on defence and technology cooperation
If managed well, the summit deliverables could reposition Europe as India’s most consequential economic partner and elevate India as a pillar of the EU’s Indo-Pacific strategy.
As economics increasingly drives geopolitics, the India–EU relationship has shifted decisively—from intent to impact.