India–EU and EU–Vietnam Free Trade Agreements: New Opportunities for European Companies

The European Union and Vietnam are set to elevate their bilateral relations to a “Comprehensive Strategic Partnership,” marking a new milestone in more than 35 years of cooperation. The announcement was made during the official visit of António Costa, President of the European Council, to Vietnam.

During his visit to Hanoi, President Costa met with Vietnam’s political leaders in order to personally reaffirm the European Union’s commitment to deepening political dialogue and strengthening bilateral relations. The decision to further develop the partnership reflects the dynamic and steadily evolving nature of EU–Vietnam relations, which are grounded in mutual respect and trust. During the visit, President Costa emphasized Vietnam’s important role in the Indo-Pacific region and highlighted the strategic significance of deepening cooperation between the European Union and the member states of the Association of Southeast Asian Nations (ASEAN). He also reaffirmed the EU’s commitment to close cooperation with Vietnam and expressed strong support for the promotion of stability, sustainable development, and open international cooperation.

Economic relations between the European Union and Vietnam have already been robust in recent years: the European Union is one of Vietnam’s largest trading partners. The EU–Vietnam Free Trade Agreement (EVFTA) has been in force since August 2020 and has delivered tangible benefits for businesses and citizens alike. At the same time, cooperation in the fields of sustainable development and green growth continues to expand within the framework of the EU’s Global Gateway strategy. The EVFTA has served as a significant driver of trade expansion between the EU and Vietnam. Over the past five years, it has generated nearly 300 billion USD in bilateral trade, making Vietnam the EU’s most important trading partner within the ASEAN.

Alongside the deepening of cooperation with Vietnam, the European Union has also strengthened its economic relations with other major Asian economies. Negotiations on the comprehensive free trade agreement between India and the European Union (India–EU FTA) were successfully concluded on 27 January 2026, and the agreement is currently undergoing the ratification process and technical legal finalization. The agreement is widely regarded as one of the largest trade deals in the world, as it establishes a common market affecting more than two billion consumers and introduces immediate tariff elimination on over 90 percent of traded goods between the parties. It is therefore unsurprising that the agreement has earned the nickname “the mother of all deals.”

How do the India–EU FTA and the EVFTA complement each other?

When these developments are viewed together, the European Union’s Indo-Pacific strategy becomes clearly visible. The EU seeks to strengthen its presence in the region primarily through trade partnerships with key economies in South and Southeast Asia. This institutionalized approach—implemented through structured trade frameworks—aims to enhance the resilience of global supply chains, promote economic diversification, and reinforce the European Union’s position as a norm-setting actor in international trade.

The India–EU FTA and the EVFTA complement each other in several important ways. While the India–EU FTA establishes one of the largest integrated trade areas in the world, encompassing nearly two billion people, the EVFTA—and, more broadly, the EU’s trade initiatives in Southeast Asia—focuses on deeper economic integration with some of the fastest-growing and most interconnected markets in the region.

In this context, the India–EU FTA and the EVFTA illustrate how complementary trade agreements and economic corridors can provide diversified entry points for European companies seeking to expand their presence in Asian markets.

All of this confirms that the European Union is a reliable and long-term partner for the countries of the Indo-Pacific region. This partnership is guided by a shared commitment to an open, inclusive, rules-based multilateral order, as well as by a mutual dedication to regional integration and sustainable economic cooperation.