India and the European Union have finalized the free trade agreement they have been negotiating for almost two decades, Indian government officials announced on Monday.

India is expected to ease market access for key European products, such as cars and wine, in exchange for easier exports of textiles, pharmaceuticals, and other goods.

The two sides are also expected to agree on arrangements to facilitate the movement of seasonal workers, students, researchers, and highly skilled professionals.

“The official negotiations are concluding, and both sides are ready to announce the successful completion” of talks at Tuesday’s summit, Indian Trade Minister Rajesh Agrawal told AFP.

“The final negotiations were focused and fruitful, and now we are very optimistic about reaching this historic trade agreement,” an EU official said anonymously on Monday. Talks continued until the last moment on Monday, focusing on a few points of disagreement, such as the impact on steel of the EU’s carbon emissions tax, according to sources familiar with the discussions.

In this context, India’s Trade Minister Piyush Goyal described the new agreement as “the mother of all agreements.”

Trade between the two sides reached €120 billion in 2024, marking an increase of nearly 90% over the past decade, according to EU data. Trade in services amounts to around €60 billion.

Also in New Delhi are European Commission President Ursula von der Leyen and European Council President António Costa as special guests at India’s Republic Day parade. The European officials watched the military parade alongside Indian Prime Minister Narendra Modi.

“The EU is expected to gain the highest level of access ever granted to a trading partner in the traditionally protected Indian market,” von der Leyen said on Sunday, adding that exports to India are expected to double.

The EU sees India, the world’s most populous country, as an important market for the future. From New Delhi’s perspective, the European Union is seen as a critical source of technology and investment urgently needed to quickly upgrade its infrastructure and create millions of new jobs.