By bizn_fun 
Von der Leyen and European Council President António Costa are in Delhi, where they met Modi at a bilateral summit.
The European Commission said the agreement would eliminate tariffs on most exports of chemicals, machinery and electrical equipment, as well as aircraft and spacecraft, following phased reductions. Significantly, duties on motor vehicles, currently as high as 110%, would be cut to 10% under a quota of 250,000 vehicles.
The deal is set to lower costs for European products entering India – such as cars, machinery and agricultural food items, after import duties are reduced. Sensitive agricultural sectors, including dairy and sugar, have been excluded.
Brussels said the agreement would support investment flows, improve access to European markets and deepen supply-chain integration.
“This is a historic agreement,” Modi said. “It will make access to European markets easier for India’s farmers and small business. It will also boost manufacturing and services sectors. It will boost innovative partnerships.”
The deal comes as both India and the EU contend with economic and geopolitical pressure from the US.
Delhi is grappling with 50% tariffs imposed by President Donald Trump last year amid talks aimed at securing a trade deal between India and the US that are still dragging on.
Last week, Trump threatened to escalate his trade war with European allies for opposing a US takeover of Greenland before backing off.
That larger geopolitical context was evident in recent statements made by leaders.
On Tuesday, von der Leyen wrote: “We have created a free trade zone of two billion people, with both sides set to benefit. This is only the beginning. We will grow our strategic relationship to be even stronger.”
A day before that Costa had said, external, without naming the US, that the trade deal would send an “important political message to the world that India and the EU believe more in trade agreements than in tariffs” at a time when protectionism is on the rise and “some countries have decided to increase tariffs”.
Von der Leyen and Costa arrived in Delhi over the weekend and were the chief guests at India’s colourful Republic Day celebrations on Monday.
On Tuesday, the leaders posed for photos with Modi, with the bonhomie between them evident.
The formal signing is likely to take place only later this year, after the agreement is approved by the European Parliament and the European Council.
Alongside the trade agreement, India and the European Union are also advancing separate talks on security and defence co-operation, and climate action.
On Tuesday, India’s Defence Minister Rajnath Singh said he had discussed a range of bilateral security and defence issues with the European Commission’s vice-president Kaja Kallas, including opportunities to integrate supply chains to build trusted defence ecosystems and develop future-ready capabilities.
Reuters news agency reported that the two sides are working on a draft security and defence partnership covering areas such as maritime security, cyber threats and defence dialogue.