What happened:
On January 12, 2026, German Chancellor Friedrich Merz said concluding the India–European Union Free Trade Agreement is essential to realising the full potential of India–Germany economic relations. Speaking alongside Prime Minister Narendra Modi in Gandhinagar, he described India as a “desired partner” and a “partner of choice” for Germany. He also noted the changing global order and announced the signing of an MoU to deepen defence industry cooperation and strengthen global supply chains.
Why it matters to India:
A concluded EU–India FTA would significantly boost India’s access to European markets, deepen strategic economic ties with Germany, and strengthen India’s role in defence manufacturing, innovation, and resilient global supply chains amid shifting geopolitical dynamics.