The two sides announced the conclusion of negotiations on the pact on January 27. The pact is likely to be implemented this year itself, creating a free market for 2 billion people in India and 27 European Union countries.
The FTA is widely described at top levels as the ‘mother of all deals’.
Goyal’s metaphor
Asked whether the mother will be strict or lenient, Goyal said: “Neither… This mother will be compassionate, this mother will be loving, and this mother will ensure that both her children and, for that matter, the 27 countries of Europe and India, all 28 children will enjoy the fruits of this FTA.”
India already has a trade surplus in exports of both goods and services to the European Union, he added.
Duty-free access
With 99 percent of India’s exports set to get duty-free access from the first day of the pact’s implementation, the country’s outbound shipments are likely to double within five years, Goyal told PTI Videos in an interview.
Duty-free access for domestic businesses in Europe will provide a major boost to many sectors, such as leather goods, sportswear, toys and maritime products.
Trade numbers
India’s bilateral trade in goods with the EU between 2024 and 2025 amounted to USD 136.53 billion (exports worth USD 75.85 billion and imports worth USD 60.68 billion), making the EU India’s largest trading partner for goods. India’s service exports amounted to $46 billion.
The EU market accounts for about 17 percent of total Indian exports, and the bloc’s exports to India represent 9 percent of total overseas shipments.
“I could easily see a doubling of exports,” Goyal said.
He appealed to domestic companies to “seize” the opportunities, increase investment, expand capacity and step out of the cozy comfort of the large and huge domestic market.
Standards concern
He was responding to a question on whether the EU’s stringent safety and quality standards could pose challenges for Indian exporters.
Meeting EU standards will not be a challenge as domestic exporters have the capabilities, resources and knowledge.
“All we have to do is expand capabilities, we have to get out of the cozy comfort of this big, huge domestic market and look for external markets, which we open through these various trade agreements, especially in developed countries where you get a good price, where there is no competition, because we largely export labor-oriented goods and services,” he said.
Complementary trading
The EU mainly exports innovative products that India needs in its development cycle, the minister said, adding that the two complement each other.
“So it is a very calibrated opening. Wherever there is a potential for competition in the future, as we also move forward in the development cycle, we have kept a longer transition period so that the Indian industry can be competitive,” he said, adding that “while we have business to take care of, we also have 140 crore consumers to take care of.”
Consumer focus
Consumers are the biggest stakeholders in the free trade agreement with the EU, and goods must become cheaper for them, he added.
“So it is a very fine balance that you have to create and develop, especially when there is fair play, where there is no predatory pricing or dumping of excess capacity in your economy. I think equal opportunities on both sides will bring about the balance,” Goyal said.
Indian bakers, pastry chefs, fruit juice makers and processed meat producers need not worry and will in fact look to the high-paying large European market, the minister said.
CBAM guarantees
On concerns over the Carbon Border Adjustment Mechanism (CBAM), Goyal said there are sufficient safeguards in the trade deal.
“First of all, it should be noted that CBAM applies to everyone. All domestic producers in Europe also have to pay the same taxes as people who export to Europe. You could almost think of it as a GST. Just as we have GST on both domestic and imported products, they have a CBAM on everyone. So it is not a discriminatory tax,” he said.
Safeguards include the approval of Indian verifiers so that domestic exporters do not have to go to Europe for verification of their carbon print. This will save a lot of costs thanks to the FTA, and the industry can have products certified and sell them to Europe.
Tax compensation
Taxes paid in India for carbon will also be recognized and offset against the CBAM payment.
He added that India, for its part, is already taking a series of measures to decarbonize its economy.
“Also, there is a huge potential for our hydrogen, green hydrogen, green ammonia, our solar equipment and our wind equipment to sell in the European Union. So basically this (trade pact) opens the doors for us,” Goyal said, adding that some Indian steelmakers themselves are going green at a faster pace.
The EU introduced CBAM, or carbon tax, on carbon-intensive imports such as steel from January 1.
Steel sector
Asked whether this mechanism would pose challenges to India’s steel sector, which is more carbon-intensive than the global average, the minister said there were two aspects to the issue: CBAM would apply even without an FTA and that the pact provides additional safeguards, including the presence of verifiers in India.
“If we feel that we are being discriminated against, or that it is hurting our exports in any way, or that new sectors are emerging (under this regulation), we can talk to Europe and redress the balance to ensure that our exporters are not hurt, or that the benefits of the FTA are not damaged,” he said.
Ready for the future
He added that the FTA is about the future.
“As I said before, we may be 30 to 40 percent more carbon intensive today, but the rate at which we are going green is so rapid that the same will become a competitive advantage for our manufacturers.”
Defense connection
Further, the minister said that Europe plans to invest $800 billion in defense over the next five years, and for that they may need skilled labor from India or they may bring their technologies here to manufacture in the country.
“So this will open up a very comprehensive, multifarious dimension between the two countries,” he said.
American deal
Asked when the ‘father of all deals’ will be completed, a reference to a deal with the United States, the minister said India aims to conclude it “quickly” as “good negotiations” are underway.
On India’s export target of $2 trillion, he expressed hope that it could be achieved by 2032.
Published on February 1, 2026
#mother #deals #pocket #Goyal #pact #compassionate #fair #children