Both sides are in the final phase of negotiations, with an official announcement expected during the EU leadership’s New Delhi visit on January 27.
India has held firm on protecting agriculture and dairy, seeking phased tariff cuts in manufacturing, while the EU has pushed for deeper industrial tariff reductions and services access.
The EU’s carbon border rules and India’s demand for safeguards against climate-linked trade barriers remain areas of resistance.
India–EU FTA Heads for Closure; New Delhi Holds Line on Farms, Manufacturing
Leaders signal January 27 announcement as negotiations balance market access, domestic sensitivities, and climate-linked trade rules
Summary
Advertisement
India and the European Union have reached the final lap of the long-anticipated India–EU Free Trade Agreement (FTA). Reports suggest that the official announcement of the trade deal is expected on January 27, when European Commission President Ursula von der Leyen and European Council President Antonio Costa conclude their two-day visit to New Delhi.
Trade talks between India and the bloc date back to 2007 and were relaunched in 2022. The negotiations, now on the brink of signing, have been defined by strong red lines drawn by both sides, Moneycontrol reported.
The much-awaited deal also comes at a time when New Delhi is actively seeking to diversify market access across regions amid ongoing talks with the US, which has imposed a 50% tariff on Indian goods since August. The India–EU negotiations highlight shifting global trade dynamics, supply-chain diversification efforts by both regions, and a push to deepen strategic economic ties.
Advertisement
Union Minister of Commerce and Industry Piyush Goyal recently described the India–EU FTA as the “mother of all trades.” Speaking at the annual World Economic Forum summit, von der Leyen said New Delhi and Brussels are on “the cusp of a historic trade agreement.”
Bilateral trade between India and the EU totalled nearly $140 billion in FY25, making the bloc India’s largest trading partner.
“Even as momentum picked up in recent rounds, negotiators have remained careful to balance market-opening commitments with domestic policy priorities, making the talks as much about managing sensitivities as expanding trade,” Moneycontrol reported, citing a commerce ministry official.
Reports suggest that throughout the negotiations, India has maintained that certain sectors—particularly agriculture and dairy—will not be opened, citing farmers’ interests. New Delhi has also made it clear that select sectors require special treatment under the agreement. Additionally, India has consistently called for a calibrated and phased approach to tariff reductions in manufacturing, arguing the need to safeguard domestic producers from abrupt import competition. It is also seeking greater investment flows and expanded exports in labour-intensive sectors.
Advertisement
Meanwhile, the EU has held firm on its core commercial and regulatory priorities. “Brussels has been pushing for deeper tariff cuts on industrial goods, including automobiles and auto components, and greater access for European service providers,” Moneycontrol reported, citing sources familiar with the matter. “Improved entry into India’s large and fast-growing consumer market is seen as central to the economic rationale of the deal.”
A key point of resistance from the bloc has been India’s push for carve-outs or dilution of measures such as the Carbon Border Adjustment Mechanism (CBAM). Indian officials, however, have warned that unilateral climate-linked regulations risk becoming de facto trade barriers.
