Davos, Jan 20 — India and the European Union are on the verge of concluding a long-pending free trade agreement that could create a market of nearly two billion people and account for almost a quarter of global GDP, European Commission President Ursula von der Leyen said on Tuesday.
Speaking at the World Economic Forum in Davos ahead of her visit to New Delhi, von der Leyen said negotiations on the ambitious trade pact were close to completion and could be formally wrapped up at the India–EU summit on January 27.
“I will travel to India. There is still work to do. But we are on the cusp of a historic trade agreement. Some call it the mother of all deals,” she said. “It would create a market of two billion people, accounting for almost a quarter of global GDP.”
Von der Leyen, accompanied by European Council President Antonio Costa, will be in India from January 25 to 27 as chief guests for the Republic Day celebrations and will hold summit-level talks with Prime Minister Narendra Modi.
She said the proposed agreement would give Europe an early advantage in deepening economic ties with one of the world’s fastest-growing regions. “Europe wants to do business with the growth centres of today and the economic powerhouses of this century,” she said.
The European Union is India’s largest trading partner, with bilateral trade in goods reaching $135 billion in 2023–24. Officials on both sides expect the FTA to significantly expand trade and investment ties at a time when global commerce faces disruption amid shifting tariff policies in the United States.
Beyond trade, the summit is also expected to unveil a Security and Defence Partnership and a comprehensive strategic agenda to guide India–EU relations from 2026 to 2030. The proposed defence pact is aimed at strengthening cooperation, improving interoperability and opening avenues for Indian firms to participate in the EU’s SAFE (Security Action for Europe) programme.
India and the EU have been strategic partners since 2004. Negotiations on the FTA were first launched in 2007 but were suspended in 2013 due to differences over ambition levels. Talks were relaunched in June 2022.
In her address, von der Leyen also spoke of wider geopolitical challenges and the need for Europe to respond decisively. “Geopolitical shocks can — and must — serve as an opportunity for Europe,” she said, arguing for greater European economic and strategic independence.
Referring to global competition and security concerns, she said Europe had stepped up defence spending. “We have done more on defence in the last year than in decades before. We have started a surge in defence spending of up to €800 billion until 2030,” she said.
On relations with Washington, von der Leyen said the EU viewed the US as a close partner. “Americans are not just our allies, but our friends,” she said, while cautioning against actions that could trigger a damaging economic spiral.