European Commission President Ursula von der Leyen and European Council President António Costa will be the chief guests at India’s Republic Day celebrations on January 26, according to a News18 report.
Prime Minister Narendra Modi and Ursula von der Leyen agreed on a February deadline for finalizing a free trade agreement this year. Their visit will coincide with the India-EU summit, where discussions are expected to focus on the proposed free trade agreement as both sides seek to move the long-awaited deal forward.
Read also | EU, Indian navy seize ship used by pirates off Somalia to seize tanker
These two events highlight the renewed strategic and economic engagement between India and the EU at the highest levels.
Trade negotiators from India and the European Union are no longer optimistic they can finalize a trade deal by the end of the year, with talks stalled on several key issues such as steel and autos, Bloomberg reported on Dec. 12, citing sources.
The main issues appear to be in sensitive industries such as automobiles and steel. Sources told Bloomberg that the EU is pushing New Delhi to increase the quota of roughly 80,000 cars that can be exported to India at reduced tariffs. Meanwhile, India is seeking lower tariffs on some steel products exported to the EU and more flexibility on the bloc’s carbon tax rules.
European Commission spokesman Olof Gill noted that after a period of “intense discussions” at the technical level, EU trade chief Maros Šefčovič visited India earlier this month to advance negotiations.
The free trade deal has been under negotiation for nearly two decades, but discussions have gained renewed urgency this year after US President Donald Trump returned to the White House, raising tariffs and disrupting global trade.
Trump’s 50% tariff on Indian goods has hit the country’s export sectors hard, prompting India to explore alternative markets.
European Commission spokesman Olof Gill noted that EU Trade Commissioner Maros Šefčovič visited India earlier this month to advance negotiations after a period of “intense discussions” at the technical level.
Piyush Goyal said “the air is pregnant with possibilities”
Earlier on December 10, Commerce and Industry Minister Piyush Goyal said that negotiations on a free trade agreement between India and the EU were continuing and a rough outline of the pact was ready.
According to him, both parties are committed to concluding an agreement soon.
“Ek FTA ki motee-motee roop rekha taiyaar ho gayee hai (rough outline of FTA ready),” Goyal said.
Asked if an announcement was expected to end negotiations in January, the minister said: “I think the air is full of possibilities”.
“I can say with certainty that both sides are committed to a deal soon. Whether it happens in a month, next week or next month, we will wait and watch,” he added.
India-EU FTA
In June 2022, India and the 27-member EU bloc resumed negotiations on a comprehensive free trade agreement (FTA), an investment protection agreement and a pact on geographical indications after more than eight years.
It was stopped in 2013 due to differences in the level of market opening.
India’s bilateral goods trade with the EU in 2024–25 was $136.53 billion (exports worth $75.85 billion and imports worth $60.68 billion), making it the largest trading partner for goods.
The EU market accounts for about 17 percent of India’s total exports, and the bloc’s exports to India account for 9 percent of its total overseas shipments.
Read also | A deal is closer than ever for India and the EU
As well as calling for significant cuts in tariffs on cars and medical devices, the EU wants tax cuts on other products such as wine, spirits, meat, poultry and a strong intellectual property regime.
Indian exports to the EU, such as ready-made garments, pharmaceuticals, steel, petroleum products and electrical machinery, may become more competitive if the pact passes.
I think the air is full of possibilities.
India-EU trade pact negotiations cover 23 policy areas or chapters, including trade in goods, services, investment, rules of origin, customs regulations and trade facilitation, government procurement, dispute settlement, intellectual property rights and geographical indications.
(With input from agencies)
Key things
- Trade negotiations between India and the EU cover 23 policy areas, indicating the complexity of the deal.
- Key issues include sensitive sectors such as autos and steel, highlighting the challenges of finalizing a free trade agreement.
- The renewed urgency for negotiations is driven by the dynamics of global trade, particularly following changes in US trade policy.
