European Commission President Ursula von der Leyen declared that the European Union and India are "on the cusp" of a historic trade agreement, calling it the "mother of all deals" at the World Economic Forum in Davos, according to The Indian Express.
The announcement signals a major geopolitical realignment as the EU seeks alternatives to Chinese manufacturing and the United States retreats into protectionism under President Trump. A comprehensive trade pact between the EU and India would create one of the world's largest free trade zones, covering 1.9 billion people and roughly one-quarter of global GDP.
"This is not just about tariffs and trade volumes," said Rajesh Menon, an economist at the Delhi School of Economics. "This is about India positioning itself as the democratic alternative to China in global supply chains."
Negotiations between the EU and India have been ongoing since 2007, stalling repeatedly over disagreements on agricultural access, automobile tariffs, and data localization requirements. The renewed push comes as both sides face pressure from Trump's tariff threats and China's dominance in manufacturing.
For India, the deal offers expanded market access to 450 million European consumers, potentially boosting exports in pharmaceuticals, IT services, textiles, and automotive parts. For the EU, it provides a counterweight to China and access to India's massive consumer market.
But a billion people aren't a statistic - they're a billion stories. Lakshmi Devi, a garment worker in Tiruppur, Tamil Nadu's textile hub, earns 8,000 rupees monthly stitching clothes for export. "They say these trade deals create jobs," she said. "I've been doing this work for 15 years. My wages have barely moved."
India's negotiators face a delicate balancing act. The country's dairy farmers fiercely oppose opening the market to European imports, while Indian IT companies want easier visa access for workers to move to Europe. Automotive manufacturers want lower tariffs, but India's small car industry fears being overwhelmed by European imports.
The geopolitical timing is significant. As Trump threatens Europe with tariffs over Greenland and other issues, the EU is actively diversifying its economic partnerships. India, for its part, has been positioning itself as a reliable democratic partner, in contrast to China's authoritarian model.
"India has 1.4 billion people, a young workforce, and democratic institutions," said von der Leyen. "This partnership is strategic, not just economic."
The deal could also include provisions on climate cooperation, digital trade, and intellectual property - areas where India and the EU have found common ground despite past tensions.
For Gujarat's diamond polishing industry, Maharashtra's pharmaceutical plants, and Karnataka's IT campuses, the agreement promises expanded opportunities. Whether those opportunities translate into better wages and working conditions for ordinary Indians remains the unanswered question.
With Trump's America turning inward and China facing increasing scrutiny over human rights and trade practices, India finds itself in an unexpectedly powerful position. The "mother of all deals" may be less about tariff schedules and more about the fundamental restructuring of global economic power in the 21st century.
