May 20, 2025
The first phase will focus on core trade issues, with negotiators exploring an early harvest agreement to expedite outcomes in goods, services and investment
Talks covered key sectors including market access, customs facilitation, trade remedies, intellectual property, and sustainable development
The EU is pressing for major tariff reductions on automobiles, medical devices, wines, spirits, and meat, while India seeks better access for its pharmaceutical, textile, and machinery exports
India’s trade with the EU stood at US$137.41 billion in 2023–24, making the EU its largest trading partner for goods; services trade was valued at US$51.45 billion in 2023
India and the European Union have concluded the 11th round of negotiations on their long-awaited free trade agreement (FTA), with both sides deciding to pursue the deal in two distinct phases. The round, which ended on May 16, reflects growing recognition of global trade headwinds—particularly those stemming from tariff actions under former US President Donald Trump—that continue to cast a shadow on multilateral trade progress.
According to a senior government official, the phased approach is intended to fast-track progress on priority issues while allowing additional time to resolve more complex or politically sensitive matters. India has previously used a similar two-step framework in trade negotiations with Australia and the United States.
Commerce Secretary Sunil Barthwal recently noted that India was in favour of focusing on “first things first”—prioritising core trade issues such as goods, services, and investment—and exploring what could be fast-tracked in an early harvest deal. Such an approach, he said, allows both parties to register tangible gains even as other issues are worked out in subsequent discussions.
The EU has placed significant emphasis on reducing import duties on sectors such as automobiles, medical equipment, wines, spirits, poultry and meat products. In addition, it has called for stronger commitments from India on intellectual property rights and enforcement. Meanwhile, India is keen to secure better market access for its high-performing export sectors, including pharmaceuticals, garments, steel, petroleum products and electrical machinery—all of which stand to gain competitively if the pact goes through.
The FTA talks, which resumed in June 2022 after a hiatus of over eight years, cover 23 comprehensive chapters. These include Trade in Goods and Services, Investment, Rules of Origin, Customs and Trade Facilitation, Government Procurement, Competition, Technical Barriers to Trade, Trade Remedies, Intellectual Property, Geographical Indications and Sustainable Development, among others.
Commerce and Industry Minister Piyush Goyal visited Brussels on May 1 to assess the progress of negotiations. Earlier in February, Prime Minister Narendra Modi and European Commission President Ursula von der Leyen reiterated their commitment to concluding the agreement by the end of 2025.
India’s bilateral trade in goods with the EU reached US$137.41 billion in 2023–24, with exports amounting to US$75.92 billion and imports totalling US$61.48 billion. The EU remains India’s largest trading partner in goods, accounting for approximately 17% of total exports. Meanwhile, EU exports to India represent 9% of its overall shipments. Bilateral services trade was also robust, estimated at US$51.45 billion in 2023.
In addition to the FTA, both sides are concurrently negotiating an investment protection agreement and a pact on geographical indications (GIs), which are expected to complement the broader trade objectives. If successfully concluded, the India-EU trade deal could emerge as one of the most comprehensive and consequential trade partnerships for both economies.
Source: Business Standard