European Commission President Ursula von der Leyen on Sunday, 18 May signalled that an investment agreement between India and the European Union is the logical next step following the landmark India-EU Free Trade Agreement (FTA), speaking at a joint press conference at the European Round Table for Industry in Gothenburg, Sweden. She was joined at the event by Swedish Prime Minister Ulf Kristersson and Prime Minister Narendra Modi.

The 'Mother of All Deals' and What Comes Next

Von der Leyen described the already-concluded India-EU FTA in striking terms: 'We succeeded indeed in concluding our landmark trade agreement. We call it the mother of all deals,' she said. The EU Chief added that the immediate priority is ensuring businesses can begin capitalising on the deal from day one, with clear information and guidance in place ahead of its application — reportedly targeted for this year.

However, she was clear that trade alone does not complete the picture. 'Trade is only half of the equation,' she said, framing the proposed investment agreement as the 'missing piece of the puzzle in our reinforced economic cooperation, especially in a world where supply chains are being reshaped and economic security challenges as never before.'

Investment Agreement: Opening a New Door

Von der Leyen used a pointed metaphor to explain the sequencing: 'One can say the trade agreement opened the door. An investment agreement walks us through this door.' The proposed pact is seen as critical to deepening bilateral economic ties at a time when global supply chains are being restructured and economic security has risen to the top of policy agendas across both regions.

She also highlighted the role of individual member states, noting that Sweden had already moved to build stronger bilateral ties with India and expressing hope that other EU member states would follow its example.

Modi Responds on X, Underscores Strong Potential

Prime Minister Narendra Modi responded to von der Leyen directly on his official X account, stating: 'It was a delight to meet you in Gothenburg, President Ursula von der Leyen. Fully agree with you on the strong potential of India-Europe ties, especially in the wake of the India-EU Free Trade Agreement.'

Von der Leyen also posted on X, writing: 'Happy to join @SwedishPM & PM @narendramodi in Gothenburg. Our EU-India agreement — the mother of all deals! — heralds a new era in our relations. We're working hard to have it applied this year. To fast-forward its benefits for our people & businesses.'

Scale of the Partnership

Von der Leyen outlined the combined economic weight underpinning the relationship: a shared market of over 2 billion people, representing close to one quarter of global GDP, with over 9 per cent of tariff cuts secured under the FTA. She described this as 'an enormous opportunity to grow trade and investment.'

Beyond trade, von der Leyen pointed to deepening security and defence cooperation. She noted that in January, alongside signing the FTA, both sides moved closer on security and defence through a dedicated partnership. The first EU-India security and defence dialogue in New Delhi has since taken place, with joint EU-India naval exercises planned, particularly focused on maritime security.

What to Watch

The investment agreement remains at the signalling stage, with no formal timeline announced. Negotiations, if launched, would add a significant new layer to an already ambitious bilateral framework. With the FTA's application targeted for 2025, the pace at which investment talks are formalised will be a key indicator of how quickly the broader India-EU economic partnership can be operationalised.