Deal Details India and the European Union have officially closed a long‑standing free trade agreement (FTA) that began talks in 2007, stalled for years, and was relaunched in 2022. The final accord was signed on 27 January 2026, following the European Commission’s submission to the EU Council on 11 September 2025.
The agreement is described as being struck on "equal terms", a phrase used by Union Minister of State for Commerce and Industry Jitin Prasada during the Uttar Pradesh International Trade Show (UPITS) on 26 September. It marks a significant milestone for India’s trade policy, which has traditionally focused on exporting goods rather than fostering deeper manufacturing ties.
India’s New Trade Strategy Prasada highlighted that the government is now insisting on joint ventures and technology transfers from foreign companies, rather than allowing them to simply sell products and exit the market. "Foreign companies can no longer just sell their product and leave. They have to sign JVs and do technology transfers," he said.
The minister also urged Indian firms to raise product quality standards to capture a larger share of global markets. "We need to ensure quality and the global market is waiting for us," he added.
Technology and AI Focus A key theme of the agreement is the role of artificial intelligence (AI) in boosting competitiveness, especially for micro, small and medium enterprises (MSMEs). Prasada cited investments by Samsung and Yotta in Uttar Pradesh as examples of an emerging ecosystem centred on data centres and AI.
He estimated that a modest 5‑10 % reduction in production costs through AI could deliver substantial benefits to smaller manufacturers. "AI adoption should lead to an increase in productivity and a decline in the cost of production," he said.
Implications for Uttar Pradesh Uttar Pradesh is positioned to become a major electronics and technology hub. The minister linked the state’s growing capabilities with India’s ambition to climb higher in global manufacturing value chains. "Design in India, chip‑making will happen in UP and Jewar Airport will help export it to the world," he said.
The state’s focus on data centres and AI is expected to attract further investment and create a conducive environment for high‑tech manufacturing.
Future Outlook Prasada stressed that policy must evolve alongside rapidly changing technologies. "The government needs to change policy with a rapidly changing tech world, and that can only be assured by a stable government," he remarked.
The FTA’s implementation will likely involve new regulatory frameworks, incentives for technology transfer, and support for AI integration across sectors. Observers will watch how India balances its traditional export‑oriented model with the new partnership‑centric approach outlined in the agreement.