India and the European Union lastly shook palms and signed the landmark Free Commerce Settlement on January 27, 2026. This deal was broadly described because the “mom of all offers” as a result of it took practically 20 years of stalled negotiations to finish. A proper detente in 2022 and a relaunch led to a complete package deal of 23 chapters overlaying items, providers, digital commerce, and sustainability.
For many who lived by means of the negotiation of India’s first main commerce settlement, the ASEAN-India Commerce in Items Settlement (AITIGA) of 2009, this stirred up recollections. The ASEAN-India deal marked a pivotal shift: India, for the primary time since liberalization in 1991, opened up its markets to a multi-country regional bloc, basically shifting away from its protectionist commerce insurance policies.
The AITIGA got here into power in January 2010. The providers settlement adopted in November 2014 – after ASEAN had already secured full entry to India’s giant home marketplace for items. The products sector was of curiosity to ASEAN at the moment, whereas India had a longtime providers sector. By agreeing to sequence them again then, India surrendered its major bargaining leverage. New Delhi then waited in useless for providers reciprocity that by no means absolutely materialized.
Utilizing its new market entry, ASEAN drove India’s commerce deficit from roughly $7.5 billion per 12 months earlier than the FTA to over $44 billion after. Despite the fact that India’s exports to ASEAN grew 65 % within the decade after the FTA, its imports surged 186 % over the identical interval. The providers settlement lastly arrived properly over 4 years later, however it provided a weak and tardy means to stability the already ballooned equation.
As one of many negotiators on the Indian facet throughout that interval, the lesson realized was clear and laborious: Don’t conclude a deal till all events are on board.
Different failures made a nasty deal worse: weak guidelines of origin, tariff asymmetry, and institutional gaps. The India-EU free commerce settlement tries to handle these flaws and provides a template for the AITIGA overview.
Underneath the AITIGA, a product may qualify as “ASEAN-origin” with simply 35 % worth addition in an ASEAN nation. In different phrases, as much as 65 % of its worth may nonetheless come from non‑ASEAN sources – like China. To deal with this, the India-EU FTA employs a dual-criteria rule: items have to be considerably remodeled (i.e., a change in customs class) and will not use too excessive a share of components from outdoors nations.
The deal was additionally asymmetrical from the beginning. India opened round 74 % of its tariff traces whereas Indonesia, New Delhi’s largest buying and selling associate throughout the ASEAN area dedicated to solely about 50 %. In contrast, the EU agreed to liberalize about 97 % of its tariff traces, whereas India reciprocated by about 92 %.
Concerning institutional gaps, the AITIGA omits funding safety, geographical indications, digital commerce, and sustainability. In distinction, the India-EU FTA covers these areas and contains separate negotiations for funding safety and a separate geographical indications settlement. Within the India-EU case, events agreed on nothing till they agreed on every part.
India is now in the course of an official overview of the AITIGA, which started in 2020 on the seventeenth ASEAN Financial Ministers India Consultations. It was tentatively anticipated to finish in 2025; it’s already 2026 and the overview continues to be underway.
The method represents each a chance and a threat for India. The chance is to use the EU mannequin’s core lesson: to insist that any renegotiation of products schedules be co-conditioned on simultaneous binding upgrades in providers entry.
Nonetheless, the chance is that if India repeats the unique mistake in reverse. It might negotiate items enhancements in isolation or settle for providers pledges which can be once more deferred to a future instrument. As occurred with the unique FTA, ASEAN won’t have any incentive to honor these guarantees as soon as the positive factors are secured.
The “mom of all offers” with the EU issues not just for its influence on commerce in items. It removes duties on Indian textiles, prescribed drugs, marine merchandise, and IT providers coming into the European market, leading to a real transformation of the commerce relationship. The EU-India FTA additionally issues as a result of it reveals that India now makes use of problem linkage as a structural device fairly than only a procedural desire.
Southeast Asia and India share too many strategic pursuits to remain locked in a one-sided FTA. The ASEAN overview provides each events a second probability, and the EU deal has set the instance.
