The EU and India finally seal their great trade agreement. Trump has accelerated what had been stuck for two decades

The European Union is beginning to make moves on a board that no longer looks like it did a few years ago. With Donald Trump straining international trade and European dependence on foreign partners increasingly at the center of the debate, Brussels seeks to gain room for maneuver. This idea of ​​strategic autonomy, repeated for years in speeches and documents, is beginning to be translated into concrete decisions. Some point to digital, others to security, and others to commerce. In this context, the announcement of a great agreement with India after almost two decades of negotiation is understood.

The advertisement. The news comes from New Delhi, after a summit in which Narendra Modi and two of the main European figures, António Costa and Ursula von der Leyen, participated. The agreement, negotiated for almost twenty years, seeks to open a new commercial stage between the European Union and India, with a scope that Brussels has wanted to highlight from the first minute. Von der Leyen defined it on social networks as “the mother of all trade agreements.”

What goes in and what stays out. The announcement speaks of a broad agreement, but its perimeter is defined quite carefully. According to Reuters, the pact focuses on trade in goods and services and rules, while especially sensitive issues, such as investment protection, are negotiated separately. In addition, there are explicit exclusions: agriculture and dairy are not part of the package, a decision that seeks to avoid resistance from some sectors.

The key is in the cars. The EU statement itself recalls that tariffs on cars imported into India can reach 110%, a barrier that in practice blocks the entry of a good part of European models. For this reason, the pact includes cuts that could place these tariffs at a minimum of 10%. These discounts would apply to a volume of up to 250,000 cars coming from the European Union. For European manufacturers, the attraction is obvious: access to a huge market that until now has been almost closed.

The exchange of concessions. The potential benefits are distributed, although not symmetrically. India would gain competitiveness in labor-intensive industries, such as textiles and garments, which in Europe still face tariffs close to 10%. It also seeks to improve the access of its professionals and technological services to the European market. The EU, on the other hand, aims at a different objective: to better enter an expanding market, where its exports face a weighted average tariff of 9.3% and especially high charges on cars, chemicals and plastics.

A geopolitical acceleration. The timing of the announcement is not coincidental. In recent months, both India and the European Union have felt more closely the protectionist turn that accompanies the new era of Donald Trump. Reuters recalls that India has not been able to close an agreement with the Trump Administration since the White House announced the so-called “reciprocal tariffs” in April, and that in August it imposed an additional punitive tariff of 25% for the purchase of Russian oil, raising the total tax on Indian goods to 50%. For Europe, the message has been similar: tariffs have once again been an instrument of political pressure.

Nothing is in effect yet. The announcement is important, but the institutional path is just beginning. The final text must still pass legal scrutiny in Brussels and New Delhi. Then comes the most delicate stage: ratification. Reuters notes that the pact will have to be approved by the European Parliament, a process that could take at least a year. For example, the EU-Mercosur pact: it was signed on January 17, 2026 in Asunción, but days later the European Parliament decided to refer it to the Court of Justice of the EU for review, something that could delay its application for up to two years. The movement with India does not have to follow that path, but it invites us to be cautious.

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