India EU FTA talks concluded, pact may come into force next year

Indian Commerce Minister Rajesh Agrawal said on Monday that India and the European Union have successfully concluded negotiations on the proposed free trade agreement.

Describing the agreement as balanced and forward-looking from India’s perspective, Agrawal said the agreement will deepen economic integration and enhance trade and investment flows across the two economies.

He added, “The negotiations ended successfully. The agreement was completed.”

Agrawal added that a legal review of the text of the FTA is currently underway, with efforts focused on completing procedural requirements and moving towards signing the agreement as soon as possible. He added that the agreement is expected to be signed later this year and could enter into force early next year.

Negotiations on a free trade agreement between India and the European Union were first launched in 2007, but have stalled several times due to disagreements over market access, labor standards, intellectual property rights and regulatory issues. The talks were revived in 2022 and gained momentum over the past year amid global trade turmoil and increasing protectionist policies.

Officials said that the political will of both sides was the main factor distinguishing this time. New Delhi and Brussels increasingly see strategic value in securing a long-term economic partnership as they reshape global supply chains and reassess dependence on China.

One of the most important elements of the agreement is India’s offer to significantly reduce import duties on European cars, according to officials and Reuters. Completely imported cars are currently subject to customs duties ranging from 70 percent to 110 percent. Under the proposed framework, peak duties on a limited number of EU-made cars priced above 15,000 euros could be reduced to 40% up front, with tariffs gradually reduced towards 10% over time.

India-European Union agreement

Commerce Minister Piyush Goyal stressed the importance of continued participation in concluding the deal. “We are pleased to agree that the continued and constructive engagement between us and our teams over the past year has brought us closer to a fruitful outcome,” he said, adding that years of negotiations culminated in a mutually beneficial agreement. He also said: “The EU remains a vital economic and strategic partner for India.”

European Commission president Ursula von der Leyen arrived in India on a four-day visit, underscoring the importance of the agreement. She will be joined by European Council President Antonio Costa for summit-level talks with Prime Minister Narendra Modi on January 27, to highlight the EU’s strategic engagement with India.

EU Trade Commissioner Maros Sefcovic described the negotiations as exceptionally intense. “I am confident in saying that we are nearing the conclusion of our FTA negotiations. The accumulation of my extensive trade engagements in the past year likely reflects their importance,” he said, noting that this marked his 10th in-person meeting with Goyal.

The EU is India’s largest trading partner in goods, with bilateral trade estimated at $136 billion in 2024-25. After the conclusion of negotiations, the agreement will undergo legal review and will require ratification by the European parliament and approval by the Indian Union Cabinet before implementation.

Describing it as the “mother of all deals”, Goyal has previously highlighted the scale and ambition of the agreement. “They are not competitors, but partners operating at different rungs of the value chain,” said Ajay Srivastava, founder of the Global Trade Research Initiative, suggesting that the agreement is likely to expand trade and lower costs without posing major risks to Indian industry.