Watch LIVE Coverage | India-EU conclude negotiations on much awaited FTA https://t.co/K3Il6wY70B

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India and the European Union on Monday stood on the cusp of sealing a long-awaited Free Trade Agreement (FTA).

The United States has warned that Europe is financing a "war" against itself by signing the "mother of all trade deals" with India.

The European Union and India are set to announce an agreement on a long-awaited trade deal on Tuesday, forging closer economic ties to hedge against US President Donald Trump's tariffs.

As India and the European Union (EU) move closer to finalising a landmark free-trade agreement, Prime Minister Narendra Modi hailed the move, saying the trade pact will boost the manufacturing sector and support services.

"The India-EU Free Trade Agreement complements the India-UK trade deal. It will boost the manufacturing sector and support services," PM Narendra Modi said at India Energy Week. He said the deal is being hailed as the mother of all trade deals. 

From 1980 to 2005, EU-India trade grew from €4.4 billion to €40 billion.

At the time, the EU was India's largest trading partner, accounting for 22.4 per cent of Indian exports and 20.8 per cent of imports.

While the EU accounted for 21 per cent of Indian trade, India's share of EU trade was less than 1 per cent, and while the EU was India's largest trading partner, India was the EU's 14th largest partner.

The European Union and India will explore possibilities for Indian participation in European defence initiatives, according to a draft security and defence partnership document seen by Reuters.

 India is moving closer to finalising a landmark defence and trade partnership with the European Union, as a high-level EU delegation held discussions with Defence Minister Rajnath Singh in New Delhi on Tuesday. The meeting held at Singh’s office takes place amid broader negotiations to deepen strategic, economic, and security ties between India and the EU.

The talks coincide with the four-day visit of European Commission President Ursula von der Leyen, who arrived in India on January 24. She is scheduled to hold talks with Prime Minister Narendra Modi at the 16th India–EU Summit later on Tuesday, alongside visiting European Council President Antonio Costa.

The summit is expected to mark a major milestone in bilateral relations, with officials set to announce the conclusion of negotiations on the long-awaited India–EU Free Trade Agreement (FTA), described by officials as the “mother of all trade deals”.

Commerce Secretary Rajesh Agrawal confirmed on Monday that India and the EU have successfully concluded negotiations on the FTA and that a formal announcement would be made at the summit. He described the agreement as balanced and forward-looking, stating that it would significantly boost trade and investment flows while strengthening economic integration between the two parties.

A free trade removes trade barriers and helping companies to easily export/import.

It opens up services and public procurement markets.

The pact can ensure protection of geographical indications.

It achieves ambitious commitments on trade and sustainable development.

It makes sure the agreed rules are enforceable.

A free trade agreement (FTA) is an agreement between the countries or regional blocks to reduce or eliminate trade barriers through mutual negotiations with a view to enhancing trade

It can, however, be comprehensive to include goods, services, investment, intellectual property, competition, government procurement and other areas.

On goods, the key areas covered are customs duties or tariffs, rules of origins, non-tariff measures such as technical barriers to trade (TBT), sanitary phytosanitary (SPS) measures, trade remedies, etc.

On services, the negotiations are on barriers to various modes of supply, including domestic regulations.

The United States has warned that Europe is financing a "war" against itself by signing the "mother of all trade deals" with India.

India and the European Union (EU) have concluded negotiations for a proposed free trade agreement aimed at boosting two-way trade and strengthening economic ties between two of the world's largest economies.

India and the European Union (EU) are likely to announce a historic, mega free-trade agreement (FTA) today. The two sides are expected to produce a broader vision to navigate the uncertainties triggered by US President Donald Trump's policies.

India's equity benchmarks are likely to open higher on Tuesday, supported by prospects of an India-European Union trade deal and hopes that the U.S. may lift tariffs linked to India's Russian oil purchases.

Gift Nifty futures were trading at 25,197, as of 7:53 a.m. IST, indicating that the Nifty 50 could start above Friday's close of 25,048.65. Last week, the index recorded its steepest weekly loss in four months.

Indian markets were closed on Monday.

Prime Minister Narendra Modi is set to host the 16th European Union-India Summit in the national capital on Tuesday with President of the European Commission, Ursula von der Leyen, and visiting President of the European Council, Antonio Costa, to announce the ‘month of all trade deals’. According to Commerce Secretary Rajesh Agrawal, India and the EU have concluded negotiations on the much-awaited Free Trade Agreement (FTA) and the announcement of the conclusion of talks will be made at the 16th India-EU Summit.

The Summit will offer an opportunity to build on the EU-India strategic partnership and further strengthen collaboration across key policy areas such as trade, security and defence, the clean transition and people-to-people cooperation. According to officials, the signing of the deal will take place in about six months after the legal scrubbing. The deal is expected to come into effect sometime next year.

The summit is taking place against the backdrop of the positive momentum in EU-India relations in recent years. Describing the agreement as balanced and forward-looking, Agrawal noted on Monday that it would strengthen economic integration between India and the EU and significantly boost trade and investment flows.