India, EU finalise landmark trade deal: Modi

India and the European Union have finalised a landmark trade deal that will represent a quarter of the world's economy, Indian Prime Minister Narendra Modi said on Tuesday, as the two sides seek to hedge against fickle ties with the US.

After nearly two decades of on-off negotiations, the deal will pave the way for India to open up its vast and guarded market, the world's largest, to free trade with the 27-nation EU, its biggest trading partner, reports Reuters.

Addressing the Indian Energy Week virtually, Modi congratulated all on the EU-India trade deal and said "I am informing you about a big development … a significant agreement was signed between India and Europe yesterday (Monday)."

"People around the world are calling this the mother of all deals. This agreement will bring major opportunities for the 1.4 billion people of India and the millions of people in Europe," he said.

"This is an excellent example of coordination between two economies of the world. This agreement represents 25% of the global GDP and one third of the global trade," he said.

Modi and European Commission President Ursula von der Leyen are expected to make a joint announcement at an India–EU summit in New Delhi, along with the details of the deal, later on Tuesday.

Trade between India and the EU stood at $136.5 billion in the fiscal year through March 2025.

The agreement comes days after the EU signed a pivotal pact with the South American bloc Mercosur, following deals last year with Indonesia, Mexico and Switzerland.

"This free trade agreement will strengthen confidence in India for every business and every investor in the world. India is working extensively on global partnerships in all sectors," he said.

During the same period, New Delhi finalised pacts with Britain, New Zealand and Oman.

The spate of deals underscores global efforts to hedge against the United States as President Donald Trump's bid to take over Greenland and tariff threats on European nations test longstanding alliances among Western nations.

Trump has imposed a 50% tariff on goods from India and an India-US trade deal collapsed last year after a breakdown in communication between the two governments.

The formal signing of the India-EU deal would take place after legal vetting expected to last five to six months, an Indian government official aware of the matter has said.

"We expect the deal to be implemented within a year," the official added.