April 9, 2025
India, EU consider phased negotiations for FTA amid rising global trade protectionism
India-EFTA deal ratified by all four member states; implementation eyed for end-2025
EU-India trade talks cover 23 chapters, including goods, services, IPR, and sustainability
EU remains India’s largest trading partner for goods with over $137 billion in trade in 2023–24
Amid a turbulent global trade landscape following the United States’ sweeping tariff hikes, India and the European Union (EU) are exploring a phased approach to completing their much-anticipated free trade agreement (FTA). This strategy could help expedite negotiations by allowing early consensus on less contentious areas while deferring complex issues to a second stage.
“FTA in tranches are being explored with the EU,” a senior official confirmed, noting that India has previously adopted a similar model with Australia, leading to more pragmatic and time-efficient outcomes.
The 10th round of India-EU FTA negotiations concluded last month in Brussels, with the next round scheduled for May in New Delhi. Progress is said to have accelerated following the recent visit of European Commission President Ursula von der Leyen and senior EU political leaders to India.
The India-EU FTA negotiations, which were stalled in 2013 due to disagreements over market access and regulatory frameworks, resumed in June 2022. Since then, the dialogue has expanded to cover 23 chapters, including Trade in Goods and Services, Investment, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Intellectual Property Rights (IPR), Geographical Indications (GIs), and Sustainable Development.
According to trade experts, a trade deal with the EU has become more strategic in light of the protectionist measures implemented by the US on April 3. Strengthening bilateral and regional trade partnerships is seen as essential to buffer against external shocks.
During a meeting on February 28, Prime Minister Narendra Modi and the EU Commission President committed to sealing the deal within 2024.
The EU has called for duty reductions on automobiles, medical devices, wines, and spirits and a stronger IPR regime. On the other hand, Indian exporters are keen to secure preferential access for key products like ready-made garments, pharmaceuticals, petroleum goods, and electrical machinery—all of which could become more competitive with tariff relief.
In 2023–24, India’s bilateral trade in goods with the EU reached US$137.41 billion (exports: US$75.92 billion; imports: US$61.48 billion), making the EU India’s largest trading partner in goods. The EU accounted for about 17% of India’s total exports, while India made up 9% of the EU’s global exports. The services trade stood at US$51.45 billion in 2023.
Beyond trade, the partnership seeks to attract investments and institutional collaboration through a tripartite negotiation structure—an FTA, an Investment Protection Agreement, and a Geographical Indications (GIs) Agreement.
Parallel to its EU engagement, India is also moving ahead with its trade pact with the European Free Trade Association (EFTA)—comprising Iceland, Liechtenstein, Norway, and Switzerland. All four national parliaments have ratified the Trade and Economic Partnership Agreement (TEPA) signed on March 10, 2024.
Only Switzerland remains, where a public referendum is legally required for final ratification. The pact is expected to be implemented by the end of 2025.
Under TEPA, India has secured an investment commitment of US$ 100 billion over 15 years from EFTA members. In return, India will lower or eliminate duties on several high-value goods, including Swiss watches, chocolates, and cut and polished diamonds.
Source: Business Standard