Renewing Momentum in a Stalled Trade Partnership
India and the European Union have resumed high-stakes negotiations in Brussels for the 14th round of talks aimed at finalising a long-pending Free Trade Agreement (FTA). The discussions, set to run over five days, mark a crucial attempt to bridge gaps in one of the world’s most anticipated trade deals.
This round is expected to be followed by a meeting between Commerce Minister Piyush Goyal and EU Executive Vice-President Maros Šefčovič in South Africa, on the sidelines of the G20 trade ministers’ summit—signalling strong political intent on both sides to seal the pact by year-end.
Reviving a Strategic Economic Alliance
The FTA negotiations—revived in 2022 after nearly a decade-long pause—come at a time when both India and the EU are seeking to diversify trade ties amid rising global protectionism. With mounting concerns over tariffs and supply chain disruptions, the two partners see the deal as a strategic hedge against uncertainty.
EU Ambassador Hervé Delphin emphasized that both economies, representing the second and fourth largest markets globally, must “use the FTA to diversify trade, hedge against uncertainties, and strengthen supply chains.” He reiterated that EU President Ursula von der Leyen and Prime Minister Narendra Modi have set an ambitious target: to conclude the FTA by the end of this year.
Key Issues on the Table
The negotiations span 23 broad policy areas, ranging from market access and digital trade to sustainable development and intellectual property rights. However, market access and rules of origin remain the most contentious chapters.
The 13th round, held in New Delhi last month, ended without a breakthrough on sensitive issues such as agriculture and automobiles, where the EU seeks greater entry into Indian markets. Conversely, India is pressing for relaxations on the EU’s upcoming carbon border tax—set to take effect in January on imports of steel, aluminium, cement, and fertilisers—arguing that it could disadvantage developing economies.
New Delhi is also lobbying for duty-free access for labour-intensive goods like textiles, footwear, and furniture, alongside emerging sectors such as automotive components and electronics.
A Partnership of Economic Weight
The economic stakes are significant. The EU accounts for around 17% of India’s total exports, while its share of imports into India stands at 9%. In 2024–25, bilateral goods trade reached $136.5 billion, with India exporting goods worth $75.8 billion and importing $60.6 billion. The services trade between the two partners added another $51.4 billion in 2023, underscoring the growing depth of economic engagement.
A Race Against Time for a Balanced Deal
As negotiators work through the final rounds, the challenge lies in balancing market ambitions with mutual sensitivities. For India, the deal could open vast European markets for its exports and strengthen its global trade footprint. For the EU, it offers a gateway to one of the fastest-growing economies amid a shifting global order.
While optimism runs high, compromise will determine success. If both sides can reconcile their positions on sustainability, tariffs, and taxation, the India-EU FTA could emerge as a landmark pact—a blueprint for resilient, balanced, and forward-looking global trade cooperation.
(With agency inputs)
