The recently released draft of the free trade agreement (FTA) between India and the European Union, dubbed the 'Mother of All Deals', is set to significantly bolster bilateral trade relations. Under this agreement, both parties will grant each other 'Most Favored Nation' status for five years, allowing for tariff cuts that will help facilitate smoother economic exchanges. It is projected that 93% of India's exports will gain duty-free access to the EU market, while there will also be reduced import tariffs on European cars and wines, reflecting a deeper trade engagement between the two regions.

The FTA discussions culminated in January with intensive meetings between Indian Prime Minister Narendra Modi and top EU officials, including Ursula von der Leyen and Antonio Costa. Their talks focused on finalizing the trade agreement, which was viewed as a pivotal step towards enhancing economic ties. The discussions underscored the commitment of both sides to solidify their trading partnership and address mutual concerns, thereby creating an encouraging environment for future collaborations.

As the agreement progresses, it is expected to have profound implications for both Indian exporters and European importers. The reduction in barriers could significantly enhance the competitiveness of Indian goods in Europe, while providing European luxury car manufacturers with improved market access in India. This FTA may potentially set a precedent for future trade agreements in the region and reflect a strategic shift in how global trade dynamics are evolving, especially amidst growing geopolitical tensions.