New Delhi, Jan 23 (IANS) As India prepares to welcome the top European leadership to the Republic Day celebrations on January 26, EC President Ursula von der Leyen is upbeat on the India-Europe free trade agreement. Von der Leyen has made it clear that Europe is diversifying its markets in the wake of the US tariff turmoil and drastic change in geo-economics "And right after Davos, I will travel to India. There is still work to do. But we are on the cusp of a historic trade agreement. Some call it the mother of all deals. One that would create a market of 2 billion people, accounting for almost a quarter of global GDP," she said at the World Economic Forum.

"And, crucially, that would provide a first-mover advantage for Europe with one of the world's fastest-growing and most dynamic continents. Europe wants to do business with the growth centres of today and the economic powerhouses of this century." India and the European Union are close to finalising a landmark Free Trade Agreement, with the formal announcement expected on January 27, a day after the Republic Day celebrations, which will be attended by the top EU leadership as chief guests.

According to sources, the India-EU summit, scheduled for January 27, will witness the successful conclusion of Free Trade Agreement (FTA) negotiations. A document will be adopted by both sides to announce the conclusion of FTA negotiations, after which the agreement will be put through the required legal process and ratification by the European Parliament and Council. Both sides are also set to sign a security and defence partnership agreement and a pact to enhance mobility for Indian professionals getting employment in the EU.

The trade deal will be the largest ever that India has signed, covering goods and services with the 27-nation European Union, one of India’s biggest export destinations. Commerce Minister Piyush Goyal has termed it as the "mother of all deals" to drive home the significance. With a combined market of nearly two billion people, the agreement would link two of the world’s largest democratic economies amid the global economic uncertainty triggered by the US tariff turmoil and geopolitical tensions worldwide.

The European Union is India’s biggest trading partner, with trade in goods amounting to $135 billion in the FY24, and the FTA is expected to unlock additional market access and economic complementarities. Although the negotiations have been moving ahead, there is still a discussion on sensitive areas such as the EU’s Carbon Border Adjustment Mechanism (CBAM). India is pushing for zero-duty access for its labour-intensive sectors -- such as textiles, leather, apparel, gems and jewellery, and handicrafts. Last week, Commerce Minister Goyal stated that the talks for a trade agreement between India and the European Union have entered the final stage.