India and the European Union have concluded a major trade agreement, Prime Minister Narendra Modi said on Tuesday, as both sides look to reduce their dependence on uncertain relations with the United States.

After almost 20 years of intermittent negotiations, the pact will allow India to further open its large and traditionally protected market to free trade with the 27-member EU, its largest trading partner. Modi said the agreement is being widely described as one of the most significant trade deals to date and will create substantial opportunities for India’s 1.4 billion people as well as millions across Europe.

Modi and European Commission President Ursula von der Leyen are expected to jointly announce the deal and provide further details at an India–EU summit in New Delhi later on Tuesday.

Trade between India and the EU reached $136.5 billion in the fiscal year ending March 2025. The agreement follows the EU’s recent deal with the South American bloc Mercosur, as well as earlier agreements with Indonesia, Mexico and Switzerland. Over the same period, India also finalised trade pacts with Britain, New Zealand and Oman.

The wave of agreements highlights efforts by major economies to diversify trade partnerships amid strains with the United States, as President Donald Trump’s tariff threats against European countries and his controversial bid to take over Greenland have unsettled traditional alliances.

Trump has imposed a 50% tariff on Indian goods, and negotiations for an India–U.S. trade agreement collapsed last year after talks broke down between the two governments.

According to an Indian government official familiar with the process, the formal signing of the India–EU agreement will take place after legal review, which is expected to take five to six months. The deal is expected to come into force within a year.