What is the ‘Mother of all Deals’ and why the trade pact between India and Europe is seen as historic

The dates of 26th and 27th January are being seen as historic not just for India, but for global politics and economics. A major agreement is about to be signed between India and European countries, which is being called the “Mother of All Deals.” It has been awaited for the past 20 years.  To finalise this long-awaited deal, top European leaders, including European Commission President Ursula von der Leyen and European Council President Antonio Costa, have arrived in New Delhi. The Indian government has rolled out a grand welcome, underlining the importance of the moment. Who said, Indian economy is dead ??The European Commission President Ursula von der Leyen has called- the upcoming "India–EU" agreement the “Mother of all Deals” and hails India as the world’s fastest-moving & most dynamic economy. pic.twitter.com/j0XcTvy26N— Kiren Rijiju (@KirenRijiju) January 21, 2026 This occasion is also special because, for the first time in India’s history, European leaders will be the chief guests on our Republic Day (26th January), and a contingent of the European military will also parade down Delhi’s Line of Duty. The primary objective of this entire agreement is to facilitate “free trade.” This will open up a huge market for 2 billion people. Furthermore, it will make both India and Europe stronger partners for trade, rather than relying on China and the United States. The ‘Mother of All Deals’: A market of 2 billion people and 25% of global GDP European leader Ursula von der Leyen has called this agreement the “Mother of All Deals,” meaning it’s the largest and most important trade agreement ever. The key reason is that when India and 27 European countries come together, they will create the largest and most powerful trading market in the world. This market will be so vast that nearly a quarter of the world’s total revenue will be tied to this deal alone. « The mother of all trade deals »We are closing in on the Free Trade Agreement.See you soon in Delhi. pic.twitter.com/gfiLv2eEam— Ursula von der Leyen (@vonderleyen) January 24, 2026 The biggest beneficiaries of this agreement will be small and large Indian businesses. Currently, when Indian goods, shoes, jewellery, or IT services are exported to Europe, they face heavy taxes. However, with this deal, our goods will be sold in European markets without any additional taxes, resulting in significant profits for Indian companies. The deal will also benefit European companies and Indian consumers. Luxury European cars such as Mercedes-Benz, BMW, and Volkswagen currently attract very high import duties in India, making them expensive. Under the new agreement, these tariffs will be reduced significantly. This means European cars could become more affordable for Indian buyers in the coming years. The same applies to European wines and other premium products, which are currently heavily taxed in India. This tariff reduction is expected to increase competition in the Indian market, giving consumers more choices and better prices. Defence and Technology: India’s entry into the ‘SAFE’ programme This agreement is not limited to the exchange of goods; India and Europe are now beginning a new chapter of friendship, called the “Security and Defence Partnership.” This step will significantly help India become self-reliant in its military and weapons. Following this agreement, Indian defence companies will be able to participate for the first time in Europe’s special fund (SAFE program), which holds approximately 150 billion euros. To date, no non-European country has had the opportunity to benefit from such a large fund, which is a matter of pride for India. Additionally, India and Europe will now share intelligence. Whether it’s maritime security, cyberattacks on the internet, or combating terrorism, both sides will work together. Europe has openly supported India after the recent terrorist attacks, stating that India has every right to retaliate in its own defence. This is a major diplomatic victory for India internationally. Another important development is that major European companies are now looking to make India their new destination, leaving China. They want to set up their factories in India, which will not only increase work in modern sectors like chips (semiconductors) and clean energy here, but India will also emerge as a major manufacturing centre for the entire world. Job boom: Golden Opportunity for Youth and Skilled professionals This major agreement will have a significant impact on employment in our country. Experts say that it will employ millions of people. Best of all, it will become much easier for Indian engineers, doctors, and scientists to travel to Europe and work. To this end, both sides are developing a special mobility framework that will eliminate visa difficulties and provide better opportunities for our talent abroad. Additionally, major European car companies will now locate their f