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

India and the European Union (EU) 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 escalating tariff pressure from the US, a robust India–EU trade pact could become a critical foundation to support exports, attract investment and catalyse employment and development.

EU Eyes Stronger Trade

The European side is also anticipating the move with a positive response. According to The Tribune and ET, Maros Sefcovic, EU commissioner overseeing trade, 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. 

He said at an event organised by the Automotive Component Manufacturers Association on September 12, reported The Hindu, that they have been negotiating this for quite some time but never had the kind of momentum seen now. 

According to the EU trade policy report, India is the EU’s ninth largest trading partner, with goods trade accounting for €124bn in 2023, representing 12.2% of India’s goods trade. Trade in services between the EU and India rose sharply, reaching €59.7bn in 2023, up from €30.4bn in 2020. In addition, the EU seeks 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. 

EU negotiators stress that 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, Global Trade Research Initiative (GTRI) said that the EU’s 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 create a costly hurdle, reported PTI. 

How India Stands to Gain

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

Minister of Commerce Piyush Goyal has repeatedly emphasised 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 $137.41bn, while services trade stood at $51.45bn. 
 
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 the 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 the EU also intends to collaborate in circular economy projects, with India’s circular economy expected to generate a market value of over $2trn and create up to 10mn jobs by 2050. 

While the pact aims to boost two-way commerce and investment, Goyal is also planning to meet Sefcovic in South Africa later this month to review the progress of talks, as the deadline to conclude the negotiations is December.