The India- European Union free trade agreement seems to be finally moving towards materialisation after years of delays and uncertainty. The possibility of finalising the deal is being strengthened by the upcoming visit of the European Union's top leadership to New Delhi later this month for the Republic Day celebrations.
EU top leadership to visit India
European Council President António Luís Santos da Costa and European Commission President Ursula von der Leyen are coming to India on a state visit from January 25 to 27. At the invitation of Prime Minister Narendra Modi, they will also be present as chief guests at India's 77th Republic Day on January 26. On January 27, both sides will jointly chair the 16th India-EU Summit.
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On the eve of this visit, India's Commerce Secretary Rajesh Agarwal has expressed optimism about the trade agreement. He stated that New Delhi and Brussels have reached the final stage of finalizing the trade agreement and special emphasis is being placed on completing it before the summit.
According to Agarwal, out of the total 24 chapters of the free trade agreement, 20 have already been fully settled. He said discussions are still ongoing on the remaining few issues and that efforts are being made to resolve them through regular virtual meetings. However, he made it clear that merely getting close to the deadline is not sufficient, stressing that what ultimately matters is finalising the agreement.
During his recent visit to India, German Chancellor Friedrich Merz indicated that the India-EU trade agreement could be signed by the end of January. He said that if the agreement is completed quickly, it would help overcome many obstacles and uncertainties that have emerged in international supply chains over the past year. He also stated that Germany has strong support for this agreement.
Background of delayed talks and renewed momentum
Discussions on a trade agreement between India and the European Union are not new. After being stalled for a long time, these discussions resumed in 2022. New momentum came after US President Donald Trump decided to increase tariffs on various countries and the India-US trade agreement stalled.
After last year’s meeting between Ursula von der Leyen and Prime Minister Modi, both sides decided to accelerate discussions by setting a target to complete the agreement by 2025. During this period, the European Union signed agreements with Mexico and Indonesia, while India completed agreements with the UK, Oman and New Zealand.
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Trade significance of the India–EU partnership
India and the European Union have been strategic partners since 2004. In 2024, total trade between the two sides reached 120 billion euros, making the EU India’s largest trading partner. In the 2024-25 financial year, India’s exports to the EU declined slightly, while imports also decreased.
Nevertheless, after America, the European Union remains India’s largest export market. Experts believe that the potential trade agreement will not only elevate economic relations between the two sides but also strengthen India’s position amid changing global trade dynamics.
