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The European Union and India have reached a free trade agreement that will lower tariffs on European cars and other products (The Wall Street Journal, subscription).

A BIG deal: The trade agreement will affect almost 2 billion consumers—making it Europe’s largest agreement by population.

• “It is ‘the mother of all deals,’ European Commission President Ursula von der Leyen said at a meeting in New Delhi.”

The details: “The EU–India deal is set to eliminate or reduce tariffs for the vast majority of goods that are traded between the two economies, according to the EU. The bloc said that should lead to EU savings equivalent to about $4.8 billion each year.”

• Meanwhile, India will remove most of its tariffs on European machinery, chemicals and pharmaceuticals, while also cutting back tariffs on “key agricultural goods,” according to EU officials.
• India will become a much more welcoming market for European cars, as “tariffs on European cars should gradually drop to 10% from their current level of 110%, with the lower tariffs applying to a maximum of 250,000 vehicles each year.”
• European tariffs on Indian labor-intensive goods, such as those made by the textiles, apparel, footwear, marine products, plastics, chemicals and jewelry industries, will be eliminated almost entirely, according to India’s Trade Ministry.
• The deal also includes commitments on customs and trade facilitation, technical barriers to trade, intellectual property rights and services trade, among others.

More cooperation: In addition to the trade pact, the EU and India also agreed to a defense and security partnership and a framework to facilitate mobility for skilled workers and students.

The bigger picture: This deal follows several other trade agreements among U.S. allies made within the past year, including a U.K.–India deal, an EU deal with four South American countries, updates to an existing U.K.–South Korea deal and a U.K.–EU trade and defense deal.

Next steps: The agreement must be finalized and ratified by both sides. In the EU, that could take a year or more, as both the European Parliament and the bloc’s member countries must sign off.