Daijiworld Media Network – New Delhi
New Delhi, Mar 9: India and the European Union (EU) are set to begin the next round of negotiations on their proposed Free Trade Agreement (FTA) in Brussels on Monday, with both sides aiming to finalize the deal by the end of this year, according to a senior official.
The renewed push follows a commitment made by Prime Minister Narendra Modi and European Commission President Ursula von der Leyen during their meeting in Delhi last month to accelerate negotiations and reach a balanced, ambitious, and mutually beneficial trade pact.
"A free trade agreement between the EU and India would be the largest deal of this kind anywhere in the world. I am well aware it will not be easy. But I also know that timing and determination count, and that this partnership comes at the right moment for both of us," von der Leyen stated during her two-day visit to India.
Her remarks come amid growing uncertainty in global trade, particularly following U.S. President Donald Trump's proposal for massive tariff hikes under his 'America First' policy, which threatens to disrupt international commerce.
While both sides are eager to finalize the agreement, major hurdles remain, particularly in sectors such as automobiles, agriculture, whisky, and pharmaceuticals. The EU seeks lower tariffs on cars, wine, whisky, and agricultural products, while India is pushing for greater market access and tariff reductions for pharmaceuticals, textiles, and apparel.
Negotiators will also focus on advancing two parallel agreements: an Agreement on Investment Protection and an Agreement on Geographical Indications.
The EU remains India’s largest trading partner, accounting for €124 billion in goods trade in 2023, representing 12.2% of India's total trade. Trade in services between the two partners nearly doubled since 2020, reaching €60 billion last year, with digital services comprising a third of the total. By comparison, the U.S. (10.8%) and China (10.5%) each account for a slightly smaller share of India's total trade. Meanwhile, India is the EU’s ninth-largest trading partner, representing 2.2% of the bloc’s overall trade, according to World Economic Forum (WEF) data.
Despite significant growth in India-EU trade—up 90% over the past decade—negotiations on an FTA have faced multiple delays due to persistent disagreements over key sectors. However, with global economic uncertainties mounting, both sides are under pressure to overcome differences and finalize an agreement that could unlock new trade opportunities for businesses across both regions.