It’s Wednesday, January 28, 2026, and if you’re looking for the exact moment the “American Century” of trade finally met its match, it was yesterday in New Delhi. While the US Treasury was busy issuing threats, India and the EU finally signed the “Mother of All Deals”—a Free Trade Agreement (FTA) that’s been stuck in the “negotiation” phase since 2007.
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The thing is, this isn’t just about cheaper wine or olive oil. It’s a massive middle finger to trade coercion. Or nothing.
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The “Rerouting” Reality: Field Notes
It’s an ongoing situation where the US has spent the last year trying to “punish” India with 25%–50% tariffs for buying Russian oil. Here’s the ground reality of the Jan 27 deal:
The Spite Multiplier: Scott Bessent (US Treasury Secretary) has been all over the news lately, claiming Europe is “financing its own war” by trading with India. The thing is, his “FOMO” is showing. While Washington puts up walls, Brussels just opened the door to a 2-billion-person free trade zone. Those too.
The Tariff Math: Let’s be real—the tariff cuts are asymmetric. India is dropping duties on EU cars from 110% to 10% and spirits from 150% to 75% (eventually 20%). In return, India gets zero-duty access for textiles, gems, and marine products. The thing is, India “concedes” more on paper because it has more to gain in pure volume.
The “Mother of All Deals” Specs: We’re talking about 96.6% of EU goods and 99% of Indian exports by value. It covers 144 EU subsectors (like education and IT) and 102 Indian subsectors. And here’s the kicker—it includes a mobility framework for professionals. That means an Indian engineer can now work in Germany or France with fewer “visa-headache” hurdles. Or nothing.
Carbon Insurance: The EU’s “Carbon Border Adjustment Mechanism” was supposed to be a death sentence for Indian steel. But the thing is, this FTA embeds “MFN-style assurances” and technical support. It’s basically a hedge against Europe using climate rules as a secret tariff. And here’s the kicker—the EU is even throwing in €500 million to help India’s green transition. Those too.
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India-EU FTA: The 2026 Breakdown
| Sector | Current Duty | New Reality | Impact |
| EU Cars | 110% | Phased to 10% | European luxury cars become a “mass” premium. |
| Indian Textiles | 9-12% | 0% | India can finally compete with Bangladesh/Vietnam. |
| Wine & Spirits | 150% | 75% (to 20%) | Your favorite French red just got 40% cheaper. |
| Services | Vague | 144 Subsectors | “Mobility” for Indian IT and healthcare pros. |
And Here’s the Kicker…
The US Treasury claims Indian purchases of Russian oil have “collapsed,” but the thing is, Indian refiners are just getting better at rerouting. Shipments to the US have tanked, while shipments to Belgium and Germany have spiked. This FTA just builds a permanent, “durable architecture” for that rerouting. Those too.
One side comment—while the deal is signed, it still needs the European Parliament’s consent and Indian Cabinet ratification. It’s an ongoing situation that won’t fully “hit the ground” until late 2026. But the signal is sent: the world is designing routes that simply bypass Washington. Or nothing.
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