The European Union, or EU, is a group of European countries that work together for peace, stability, and shared economic growth. It is both a political and economic union. The EU allows its member countries to trade goods and services freely, move capital easily, and allow people to live, work, or study in any EU country. Member nations also cooperate on rules for trade, agriculture, climate policies, digital regulations, competition, and foreign affairs.
The EU was created after World War II to prevent conflicts in Europe and promote cooperation. It formally came into being with the Maastricht Treaty in 1993. Today, the European Union has 27 member countries. These are: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.
The EU has a single currency called the Euro, which is used by most member countries. It is also a major global economic power. Together, the 27 EU countries account for a large share of global trade and investment. The EU works to strengthen cooperation among its members and with other countries around the world.
The EU has grown over the years by adding new members and expanding its economic and political influence. Its main goals are to promote peace, stability, and economic prosperity, and to provide a platform where member nations can make joint decisions on issues that affect the entire continent.
On January 27, 2026, Prime Minister Narendra Modi announced that India and the EU have concluded a historic Free Trade Agreement (FTA). He called it the “mother of all deals” because of its scale and importance. The agreement covers trade, manufacturing, and supply chains, and is expected to reshape global economic relations.
This FTA is significant because India and the EU together represent about 25 percent of global GDP and nearly one-third of world trade. The deal opens new opportunities for Indian businesses, youth, and investors. It also strengthens global supply chains at a time of rising geopolitical tensions.
India’s sectors such as textiles, gems and jewellery, leather, footwear, manufacturing, and services are expected to benefit the most from the agreement. The FTA will help boost India’s domestic manufacturing while expanding the fast-growing services sector. Prime Minister Modi noted that this trade deal strengthens India’s role as a trusted global economic partner.
The India-EU FTA complements India’s existing trade agreements with the United Kingdom and the European Free Trade Association (EFTA). It allows India to integrate more closely with major European markets while also attracting investment from European companies. The agreement is expected to increase trade, create jobs, and improve technology and infrastructure in India.
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Trade between India and the EU is already strong. In 2024-25, total trade exceeded USD 190 billion. India exported goods worth USD 75.9 billion and services worth USD 30 billion to the EU. At the same time, EU exports to India were USD 60.7 billion in goods and USD 23 billion in services. The FTA is expected to further strengthen these trade relations by reducing tariffs, simplifying regulations, and encouraging mutual investment.
Negotiations for this agreement began in 2007 and were revived in 2022. The successful conclusion of the deal marks a decisive moment in India-EU relations. Experts say it could redefine economic engagement between India and the 27-nation European bloc for decades to come.
For Indian consumers, the FTA may result in lower prices for European goods, including industrial products, machinery, technology, and food items. Indian businesses are also expected to benefit from easier access to European markets, cheaper imports, and better opportunities for collaboration in sectors like manufacturing, pharmaceuticals, and automotive.
European companies, including small and medium-sized enterprises (SMEs), are expected to gain from preferential access to India’s large market of 1.45 billion people. The agreement includes support mechanisms for SMEs, such as helpdesks and contact points, to ensure they can take full advantage of new trade opportunities.
The FTA also strengthens India-EU cooperation in areas like supply chains, technology, and standards. By reducing trade barriers and improving economic coordination, both sides aim to make global trade more predictable, stable, and mutually beneficial. This is particularly important as countries navigate rising geopolitical uncertainties and global economic challenges.
Experts believe that the India-EU FTA will increase confidence in India among global investors and businesses. By integrating with one of the world’s largest economic blocs, India signals that it is committed to open markets, rules-based trade, and economic reforms. The deal is likely to encourage more European companies to invest in India and collaborate on technology, manufacturing, and services.
The agreement will also benefit sectors like energy, digital services, and renewable technologies. With the EU’s expertise and India’s growing market, the partnership could create new opportunities for innovation, clean energy projects, and advanced technology development.
In conclusion, the European Union is a 27-nation political and economic union that promotes peace, stability, and prosperity in Europe. It allows free movement of goods, services, capital, and people, while coordinating on major policies across its members.
The India-EU Free Trade Agreement, described by Prime Minister Modi as the “mother of all deals,” represents a historic milestone in global trade. Covering nearly one-third of world trade and 25 percent of global GDP, the agreement is expected to benefit Indian consumers, businesses, and industries by reducing costs, improving access to European markets, and strengthening global supply chains.
The FTA also enhances India’s role as a trusted partner in the global economy and complements its existing trade agreements. With sectors like manufacturing, services, textiles, and technology set to gain, the deal opens doors for economic growth, innovation, and investment. By deepening India-EU ties, the agreement is likely to have long-term positive effects on trade, investment, and cooperation between India and the European Union for decades to come.
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