The European Union and India have agreed to conclude a comprehensive trade agreement aimed at expanding economic cooperation. The deal предусматривает the elimination or reduction of tariffs on more than 96 percent of goods in bilateral trade, the parties announced on January 27.

The EU expects exports of European goods to India to double by 2032, while companies could save up to €4 billion annually in customs duties. German carmakers Volkswagen, Mercedes-Benz, and BMW are expected to benefit particularly from the agreement. India has agreed to gradually reduce import duties on cars from the current 110 percent to 10 percent.

Significant easing of conditions is also предусмотрено for alcoholic beverages: tariffs on wine will be immediately reduced from 150 percent to 75 percent, and later gradually lowered to 20 percent. Tariffs on machinery and equipment, electronics, chemical products, iron, and steel will also be reduced.

“Europe and India are making history today,” said European Commission President Ursula von der Leyen. She noted that a free trade zone covering around two billion people is being created.

Indian Prime Minister Narendra Modi called the agreement “the mother of all deals” and emphasized that it opens new opportunities for India’s 1.4 billion citizens and millions of Europeans.

According to Volker Treier, Foreign Trade Director of the German Chamber of Commerce and Industry, the agreement will be a “real game changer” for companies entering the Indian market.

The deal comes amid a global reshaping of trade. The EU and India are seeking to diversify economic ties after U.S. President Donald Trump increased pressure on partners, including through the introduction and threat of tariffs. Earlier trade talks between India and the United States had reached a deadlock.

Negotiations between the EU and India resumed in 2022 after a nine-year break and accelerated following the introduction of 50-percent U.S. tariffs on a range of Indian goods.