India and the European Union lastly shook arms and signed the landmark Free Commerce Settlement on January 27, 2026. This deal was extensively described because the “mom of all offers” as a result of it took practically twenty years of stalled negotiations to finish. A proper detente in 2022 and a relaunch led to a complete bundle of 23 chapters masking items, providers, digital commerce, and sustainability.
For individuals who lived by way of the negotiation of India’s first main commerce settlement, the ASEAN-India Commerce in Items Settlement (AITIGA) of 2009, this stirred up reminiscences. 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, essentially 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 massive 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 main 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 yr earlier than the FTA to over $44 billion after. Although 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, but it surely supplied a weak and tardy means to steadiness the already ballooned equation.
As one of many negotiators on the Indian facet throughout that interval, the lesson discovered 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 affords a template for the AITIGA overview.
Beneath the AITIGA, a product might qualify as “ASEAN-origin” with simply 35 % worth addition in an ASEAN nation. In different phrases, as much as 65 % of its worth might 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 should not use too excessive a share of components from exterior international locations.
The deal was additionally asymmetrical from the beginning. India opened round 74 % of its tariff strains whereas Indonesia, New Delhi’s largest buying and selling associate inside the ASEAN area dedicated to solely about 50 %. In contrast, the EU agreed to liberalize about 97 % of its tariff strains, 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 consists of 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 midst 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 might 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 beneficial properties 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, prescription 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 difficulty linkage as a structural device reasonably 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.