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 almost 20 years of stalled negotiations to finish. A proper detente in 2022 and a relaunch led to a complete bundle of 23 chapters overlaying items, companies, digital commerce, and sustainability.
For individuals 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, essentially transferring away from its protectionist commerce insurance policies.
The AITIGA got here into pressure in January 2010. The companies 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 companies sector. By agreeing to sequence them again then, India surrendered its main bargaining leverage. New Delhi then waited in useless for companies reciprocity that by no means totally 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. Although India’s exports to ASEAN grew 65 p.c within the decade after the FTA, its imports surged 186 p.c over the identical interval. The companies settlement lastly arrived effectively over 4 years later, however it provided a weak and tardy means to steadiness the already ballooned equation.
As one of many negotiators on the Indian aspect 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 deal with these flaws and gives a template for the AITIGA assessment.
Beneath the AITIGA, a product may qualify as “ASEAN-origin” with simply 35 p.c worth addition in an ASEAN nation. In different phrases, as much as 65 p.c 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 should be considerably reworked (i.e., a change in customs class) and should not use too excessive a share of elements from exterior nations.
The deal was additionally asymmetrical from the beginning. India opened round 74 p.c of its tariff traces whereas Indonesia, New Delhi’s largest buying and selling companion inside the ASEAN area dedicated to solely about 50 p.c. Against this, the EU agreed to liberalize about 97 p.c of its tariff traces, whereas India reciprocated by about 92 p.c.
Relating to 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 the whole lot.
India is now in the midst of an official assessment 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 assessment continues to be underway.
The method represents each a chance and a danger 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 companies entry.
Nevertheless, the danger is that if India repeats the unique mistake in reverse. It might negotiate items enhancements in isolation or settle for companies 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 aspects are secured.
The “mom of all offers” with the EU issues not just for its affect on commerce in items. It removes duties on Indian textiles, prescription drugs, marine merchandise, and IT companies 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 exhibits that India now makes use of concern linkage as a structural instrument reasonably than only a procedural choice.
Southeast Asia and India share too many strategic pursuits to remain locked in a one-sided FTA. The ASEAN assessment provides each events a second probability, and the EU deal has set the instance.
