With India–EU Summit Near, Trade Talks Step Up in Brussels to Break FTA Deadlock

India and the European Union held high-level talks on Friday in Brussels as the free trade agreement (FTA) negotiation between them entered a 'decisive' yet 'difficult' phase.

Commerce minister Piyush Goyal, who is on a two-day tour to Brussels, deliberated across key areas of the proposed agreement with EU Trade and Economic Security Commissioner, Maroš Šefčovič.

"We reaffirmed our commitment to a rules-based trading framework and a modern economic partnership that safeguards the interests of farmers and MSMEs while integrating Indian industries into global supply chains," said Goyal.

The ministerial engagements follow a week of intensive deliberations in Brussels, building upon the groundwork laid during high-level discussions held earlier this week (January 6-7) between India's Commerce Secretary Rajesh Agrawal and Director General for Trade of the European Commission Sabine Weyand.

These talks are important as both sides are looking to conclude the FTA negotiations at the earliest, which already missed the 2025 deadline. The India-EU Summit is expected on January 27 and top EU leadership will attend the Republic Day parade as the chief guest on January 26.

So far, India and EU held 16 rounds of discussions. Commerce Secretary Rajesh Agarwal highlighted last month that when trade deals reach a near conclusion, the difficulties increase.

India-EU Trade

The EU is India’s second-largest trading partner, accounting for trade in goods worth €120bn in 2024, or 11.5% of India's total trade. Meanwhile, India is the EU’s 9th largest trading partner, accounting for 2.4% of the EU’s total trade in goods in 2024, well behind the USA (17.3%), China (14.6%) and the UK (10.1%). Trade in goods between the EU and India has increased by almost 90% in the last decade.

The EU’s imports from India comprise mainly machinery and appliances, chemicals, base metals, mineral products, and textiles. The EU's main exports to India consist of machinery and appliances, transport equipment, and chemicals.

Trade in services amounted to €59.7bn in 2023 with a deficit for the EU of €7.9bn.

The EU’s share of foreign direct investment (FDI) stock in India reached €140.1bn in 2023, up from €82.3bn in 2019, making the EU a leading foreign investor in India. The stock of India’s FDI in the EU was €10.2bn.

Currently, nearly 6,000 European companies are present in India.

Recently, External Affairs Minister S Jaishankar also reiterated that 2026 will mark an upswing in India-Europe relations. Jaishankar is currently on a week-long trip to Europe, covering France and Luxembourg.