Much has been written about the political declaration by the Heads of the Government on the EU-India Free Trade Agreement (EU-India FTA) and the accompanying measures covering issues of common interest, including investment protection, security and defence, scientific research, sustainability, clean energy and resilient supply chains. The declaration made during the 16th EU-India Summit on 27th January 2026 is being hailed globally as the silver lining in an environment characterised by considerable geopolitical uncertainties and reorientation of the world order. A coming together of India and the European Union unlocks a market for 2bn people, covering 25% of global GDP and a third of global trade. No surprises that markets and businesses have reacted with a cheer, buoyed by the 'mother of all deals'.
How India-EU FTA Fires Up India’s Sustainability Priorities
FTA signals deeper India-EU cooperation on sustainability and climate
Perhaps a larger signal of the EU-India solidarity was having President Von der Leyen and President Costa as Chief Guests at the 77th Republic Day celebrations in New Delhi. Their presence at our National Day watermarked the importance and growing affinity between the two Partners, and their commitment to pursue collaboration on a wider set of issues, common interests and shared values. This solidarity between the two leading democracies is encapsulated in the document—‘Towards 2030 —Joint India-EU Comprehensive Strategic Agenda’, endorsed and adopted at India-EU Summit.
In the course of the last year or so, while global geopolitical headwinds grew stronger, the content of the Joint EU-India Comprehensive Strategic Agenda (hereinafter Joint Agenda) was deftly navigated by experienced captains on both sides. They mindfully curated the content of this partnership through uncertainties and evolving regulatory environment. The result is for all to see – underlining the need for strengthening collaboration between India and the European Union on several wide-ranging issues not limited to trade and investment, but on sustainability, resilient supply chains, energy transition and climate action among others.
The joint ambition to pursue collaboration on sustainability, resilient supply chains, clean energy, climate and related issues – is based on the evidence of existing collaboration between the two partners, not just limited to the Government agencies but also businesses and related industry stakeholders on both sides. Even as the global axis spins precariously, the two partners remain steadfast to meet challenges of economic security while investing equal attention on climate change, supply chain resilience, energy transition, sustainable livelihoods, sustainable finance among others.
Indian Businesses Advancing Climate Commitments
Currently, there are over 6,000 EU businesses in India and over 1,500 Indian businesses in the European Union. To help achieve the anticipated outcomes of the Joint Agenda, both EU and India businesses will have to continue to play an important role. For the last few years, we have been assessing EU and Indian businesses and stakeholders’ interest and experience in collaborating on sustainability, climate, resilient supply chains, etc., issues and found:
Several instances of ‘good practices’ of collaborations on sustainability and climate action exist between EU businesses and their Indian partners – and can provide valuable lessons for taking the Joint Agenda forward.
Continued interest has been noticed among EU and Indian businesses to cooperate on sustainability and climate action issues, in spite of the current regulatory uncertainties in the EU (especially with the implementation of the CSDDD).
In addition to traditional sectors like apparel and textiles, agri-food and renewables – there is considerable interest to collaborate in new areas like - sustainable mobility, green energy, AI, digitalisation and clean technology.
Indian SMEs involved as supply chain partners of EU businesses, buyers are increasingly interested in improving their awareness about ‘requirements’ to strengthen business partnerships and continuity with EU firms.
New age technologies led by Artificial Intelligence (AI) and digital innovations will play a decisive role in accelerating EU-India business collaborations for resilient and reliable supply chains.
Institutional Frameworks Bolster Cooperation
Based on publicly available information, the ‘Trade for Sustainable Development’ chapter in the EU-India FTA sets out a comprehensive framework of commitment and cooperation to balance trade and sustainable development objectives, covering – environmental protection, climate change, women’s empowerment, biological diversity, workers’ rights, etc. It also advances a mechanism for dialogue and consultation between the parties, involving civil society to assess and monitor the implementation of these provisions.
Conscious of the imperative to support EU businesses to collaborate effectively with Indian industry stakeholders on sustainability and related issues, the Federation of European Businesses in India (FEBI) has recently announced a cross-sectoral Working Group on Sustainability. Recent interactions with stakeholders in Brussels (headquarters of the European Commission) reveal considerable interest about India and the increasing convergence on areas of cooperation embedded in the Joint Agenda.
Indeed, this is the carpe diem moment, for the two partners to pursue areas of common interest and shared value. They will need to live up to the expectations of the two billion citizens, excitedly awaiting in full anticipation.
(Rijit Sengupta is CEO, while Anamika Ghosh is Senior Programme Manager at the Centre for Responsible Business. The views expressed are personal.)