Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen in New Delhi, February 28, 2025.
European Council President Antonio Costa arrived in India on Sunday, as the European Union and New Delhi seek to finalize a free trade agreement, the culmination of nearly two decades of negotiations.
Costa and European Commission President Ursula von der Leyen are guests of honor at the Republic Day celebrations in New Delhi on Monday, ahead of the EU-India Summit on Tuesday. They hope to conclude what has been called the “mother of all agreements” during the summit.
The European Council stated that this sixteenth summit between the two sides “will be an opportunity to build on the strategic partnership and enhance cooperation in various key policy areas.” India, the world’s most populous country, is expected to become the fourth-largest economy in the world this year, according to the International Monetary Fund.
“We are on the brink of a historic trade agreement”
While the European Union sees India as an important market, New Delhi views the bloc as a crucial source of technology and investment to rapidly develop its infrastructure and create millions of jobs. Von der Leyen said before the summit, “We are on the brink of a historic trade agreement.”
Bilateral trade in goods reached 120 billion euros ($139 billion) in 2024, an increase of nearly 90% over a decade, according to EU statistics, in addition to 60 billion euros ($69 billion) in services trade.
Opening new markets amid US tariffs
This agreement would represent a major gain for both sides in their quest to open new markets amid US tariffs and Chinese export restrictions.
However, negotiations are ongoing to resolve some outstanding points, including the impact of the EU’s carbon border tax on steel exports, and safety and quality standards in the pharmaceutical and automotive sectors, according to informed sources.
New Delhi is seeking to reduce its dependence on Russia for arms purchases, diversify its imports, and strengthen its domestic manufacturing base. Europe is doing likewise with the United States.
European Council
The European Council is the highest political body of the European Union, setting the EU’s overall political direction and priorities. It was established informally in 1974 and gained formal status with the 1992 Maastricht Treaty, later becoming a full EU institution under the 2009 Lisbon Treaty. Its members are the heads of state or government of the EU member states, the President of the European Council, and the President of the European Commission.
India
India is a South Asian nation with one of the world’s oldest civilizations, tracing its historical roots to the ancient Indus Valley Civilization around 2500 BCE. It is renowned for its profound cultural and religious diversity, shaped by millennia of history including major empires, the spread of Buddhism and Hinduism, and periods of Mughal and British rule.
European Union
The European Union (EU) is a political and economic union of 27 European countries, founded to foster cooperation and prevent conflict after World War II. Its origins trace to the 1951 European Coal and Steel Community, which evolved through treaties into a single market with common policies and a shared currency, the euro, used by 20 member states.
New Delhi
New Delhi is the capital of India, officially inaugurated in 1931 to serve as the new administrative center of British India, replacing Calcutta. It was designed by British architects Edwin Lutyens and Herbert Baker, featuring wide boulevards and grand government buildings like the Rashtrapati Bhavan. Today, it remains the seat of the Indian government and is a major political and cultural hub.
Republic Day
Republic Day in India is celebrated annually on January 26th to commemorate the enactment of the Constitution of India in 1950, which established the nation as a sovereign republic. The day is marked by a grand parade in New Delhi showcasing India’s military strength and cultural diversity, and it honors the date in 1930 when the Indian National Congress declared Purna Swaraj (complete self-rule) from British rule.
EU-India Summit
The EU-India Summit is a high-level biennial meeting established in 2000 to strengthen the strategic partnership between the European Union and India. It serves as a forum for leaders to discuss and enhance cooperation across areas including trade, climate change, security, and technology.
International Monetary Fund
The International Monetary Fund (IMF) is an international financial institution established in 1944 at the Bretton Woods Conference to foster global monetary cooperation and financial stability. Its primary roles include providing policy advice, financial assistance to member countries facing balance of payments problems, and promoting exchange rate stability and sustainable economic growth.
United States
The United States is a federal republic founded in 1776 following its declaration of independence from Great Britain, establishing itself through a revolutionary war and the subsequent adoption of its Constitution in 1787. Its history is marked by westward expansion, industrial growth, and significant roles in 20th-century global conflicts, evolving into a nation defined by its diverse population and cultural influence.
China
China is one of the world’s oldest continuous civilizations, with a recorded history spanning over four millennia. It is home to numerous UNESCO World Heritage sites, such as the Great Wall and the Forbidden City, which reflect its long imperial dynasties and profound cultural achievements.
Russia
Russia is the world’s largest country by area, spanning Eastern Europe and Northern Asia. Its history is marked by the rise and fall of the Tsarist Empire, the 1917 Bolshevik Revolution which established the Soviet Union, and its re-emergence as the Russian Federation in 1991 following the USSR’s dissolution.
Europe
Europe is a continent with a rich and complex history, shaped by ancient civilizations like Greece and Rome, the transformative periods of the Middle Ages and the Renaissance, and the profound impacts of two World Wars. Culturally, it is renowned for its diverse array of artistic movements, architectural landmarks, and influential philosophical and political ideas. Today, it is home to numerous UNESCO World Heritage Sites and is politically organized in part by the European Union, a unique supranational entity promoting cooperation among many of its nations.
