The European Union and India have reached a broad trade agreement that would lower tariffs on cars, pharmaceuticals and digital services, according to Reuters. The deal marks a significant step toward deeper economic ties between two of the world’s largest markets.

Officials said the pact is designed to expand market access, reduce trade barriers and help companies diversify supply chains. It also reflects a wider push by both sides to reduce reliance on China for manufacturing and strategic imports.

The agreement is expected to affect exporters, investors and technology firms, while potentially making key goods more competitive in both markets. Further details on implementation, timelines and sector-specific rules are expected as the deal moves through final procedures.

The trade accord comes as governments around the world look for new partnerships amid shifting global supply chains and rising economic competition. For the EU and India, the deal could open the door to stronger commercial and political cooperation in the years ahead.