India–EU Free Trade Talks Resume October 6 Amid US Tariff Pressures: Why It Matters

India and the European Union are preparing for the 14th round of Free Trade Agreement (FTA) talks that begin on October 6 in Brussels. The stakes could not be higher for India.

With India facing escalating tariff pressure from the United States, a robust India–EU trade pact could become a critical foundation to support exports, attract investment, and catalyse employment and development.

EU Balances Optimism With Caution

The European side is also anticipating the move with a positive response. According to The Tribune and ET, Maroš Šefčovič, EU Commissioner overseeing trade, has called the impending agreement “groundbreaking,” noting that trade between India and the EU has grown over 90% in the past decade. He observed that European companies in India already support over three million jobs.

“We have been negotiating this for quite some time but I can tell you that we never got the kind of momentum as we have right now,” he said at an event organised by the Automotive Component Manufacturers Association on September 12, reported The Hindu. 

According to the EU trade policy report, India is the EU’s 9th largest trading partner, with goods trade accounting for €124 billion in 2023 (12.2% of India’s goods trade) and trade in services between EU and India rose sharply, reaching €59.7 billion in 2023, up from €30.4 billion in 2020. In addition, the EU wants better access to services and public procurement, a more transparent and predictable regulatory environment, and the ability to enforce sustainability commitments.

The India-EU trade pact negotiations cover 23 policy areas or chapters, including trade in goods, trade in services, investment, sanitary and phytosanitary measures, technical barriers to trade, trade remedies, rules of origin, customs and trade facilitation, competition, trade defence, government procurement, dispute settlement, intellectual property rights, geographical indications, and sustainable development.

But EU negotiators also stress they will press India on sensitive sectors such as automobiles, dairy, and imports of goods with strong climate or regulatory mandates.

However, economic think tank GTRI said that the European Union’s (EU) aggressive environmental regulations, particularly the carbon tax, deforestation rules and supply chain due diligence laws could impose additional costs on Indian exports. Reconciling EU demands with India’s development priorities, particularly in digital services and compliance with EU‑style privacy regimes could incur a “costly hurdle”, reported PTI.

How India Stands to Gain

For India, the FTA is more than a routine trade deal. The trade deal is a step toward broader strategic goals. As India struggles with rising protectionism from the US, diverting more exports to Europe could help absorb the impact.

Commerce Minister Piyush Goyal has repeatedly underscored that the deal must be “balanced, ambitious, and mutually beneficial”. According to PTI, Goyal flagged that India’s goods trade with the EU in 2023‑24 was $137.41 billion, while services trade stood at $51.45 billion.

A completed FTA would reduce tariffs for Indian exporters in sectors such as textiles, pharmaceuticals, engineering goods, steel and electronics — making them more cost-competitive in Europe. According to the European think tank, Bruegel, combining FTA with a new type of investment agreement could increase export-oriented investment in India and boost its manufacturing sector.

Business Standard further reported that EU also intends to collaborate in circular economy projects, with India’s circular economy expected to generate a market value of over $2 trillion and create up to 10 million jobs by 2050.

While the pact aims at boosting two-way commerce and investments, Goyal is also planning to meet EU Trade Commissioner Maroš Šefčovič in South Africa later this month to review the progress of talks, as the deadline to conclude the negotiations is December.