India-EU Trade Deal: What It Means for Investors and Businesses in Oman
The leaders of India and the European Union are set to announce a landmark trade agreement on Tuesday in New Delhi, marking the culmination of two decades of negotiations. This significant pact has been described as the “mother of all deals.”
Prime Minister Narendra Modi confirmed on Monday that the agreement had been finalized. Ahead of the formal signing, Modi emphasized the importance of the deal in strengthening economic ties and countering challenges posed by the world’s two largest economies, the United States and China. Speaking in New Delhi, Modi stated, “This deal will bring many opportunities for India’s 1.4 billion people and the millions in the EU.” He highlighted that the agreement covers approximately 25 percent of global GDP and one-third of global trade.
The European Commission President Ursula von der Leyen and European Council President Antonio Costa, who were honored guests at India’s Republic Day parade on Monday, will meet with Modi later on Tuesday morning to formalize the pact.
The EU views India, the world’s most populous nation, as a key market for future growth. Conversely, India regards the EU as a vital source of technology and investment necessary to rapidly develop its infrastructure and generate millions of new jobs.
Bilateral trade between the EU and India reached €120 billion ($139 billion) in 2024, nearly doubling over the past decade, with an additional €60 billion ($69 billion) in trade in services, according to EU data.
The agreement will see India providing greater market access to key European products such as automobiles and wine, while the EU will ease imports of Indian textiles, pharmaceuticals, and other goods. Von der Leyen emphasized that the EU would receive the “highest level of access ever granted to a trade partner in the traditionally protected Indian market” and anticipated that EU exports to India would double. She noted the EU’s expected competitive advantage in critical industrial and agricultural sectors.
For India, the deal is expected to benefit textiles, gems and jewelry, leather goods, and the services sector. The EU will also reduce tariffs on exports such as automobiles, wine, and food products to India.
Negotiations extended until the final hours on Monday, addressing key issues including concerns about the EU’s carbon border tax on steel, according to sources familiar with the talks.
This agreement emerges as both Brussels and New Delhi seek to expand into new markets amid the imposition of U.S. tariffs and Chinese export restrictions. Alongside the trade pact, India and the EU are anticipated to finalize agreements to facilitate mobility for seasonal workers, students, researchers, and highly skilled professionals, as well as a security and defense cooperation pact.
Von der Leyen remarked on social media, “India and Europe have made a clear choice—the choice of strategic partnership, dialogue, and openness. We are showing a fractured world that another way is possible.”
India is projected by the International Monetary Fund to become the world’s fourth-largest economy this year. While historically reliant on Moscow for critical military hardware, India has recently sought to reduce dependence on Russia by diversifying imports and strengthening its domestic manufacturing capabilities.
Special Analysis by Omanet | Navigate Oman’s Market
The landmark India-EU trade pact, termed the “mother of all deals,” opens unprecedented market access, creating significant opportunities for Oman to leverage its strategic location as a trade and logistics hub connecting these booming economies. For businesses and investors in Oman, this agreement signals a rise in demand for infrastructure, technology, and supply chain services, while also posing competitive challenges as global supply chains realign. Smart players should explore partnerships and investments capitalizing on enhanced India-EU trade flows, particularly in sectors like logistics, manufacturing, and technology transfer.
