India-EU trade pact gains momentum, aims for year-end deal

The negotiations between India and the European Union on a long-pending free-trade agreement have taken a decidedly positive turn. Speaking in Brussels after a two-day visit by India’s Commerce & Industry Minister Piyush Goyal on October 27-28, EU Ambassador to India Herve Delphin hailed “substantial progress” in the 14th round of talks held in Brussels and said both sides were in a continuous negotiation mode, with a target of reaching an agreement by the end of this year.

Ambassador Delphin quoted Maros Sefcovic, European Commissioner for Trade and Economic Security, who thanked Minister Goyal for the “very productive” engagements. “We share the common objective … to deliver on the mandate given to us by President Von der Leyen and Prime Minister Modi,” Sefcovic said. “I’m glad to report that we’ve been able to progress substantially across a number of areas. A technical tariff team will travel to New Delhi to conclude discussions. Beyond tariffs, we have made good progress on measures that will further facilitate bilateral trade and investment … and we agreed with the minister that we will stay in close touch.”

Minister Goyal described his Brussels visit as “intense but very productive”. He noted that the talks had laid the framework for a “win-win” deal for both India and the EU, and reaffirmed Delhi’s commitment to realise the common vision of Prime Minister Narendra Modi and EU President Ursula von der Leyen for shared prosperity through innovation, trade, investments and job creation.

His trip to Brussels also included a meeting with Germany’s Foreign Minister Johann Wadephul, signalling the strategic importance Germany attaches to the India-EU deal. According to the Indian Ministry of Commerce & Industry, the visit was intended to provide political and strategic direction to the talks, which recently advanced during their 14th round. The visit comes against the backdrop of the India-EU partnership gaining renewed strategic depth following the Modi-von der Leyen meeting earlier this year, which emphasised a future-ready trade relationship built on prosperity, sustainability and innovation.

Historical backdrop & broader stakes The idea of an India-EU FTA is far from new. Negotiations originally began following the negotiating mandate adopted in 2007. However, after around 15 rounds of talks, the process stalled in 2013 amid unresolved differences on market access and tariff liberalisation. In June 2022, the two sides relaunched the negotiations after a lapse of over eight years.

The renewed push comes at a time when the EU is India’s largest trading partner for goods and India is a key market for the European bloc. Industry watchers believe the deal - if sealed - could significantly boost market access for Indian goods and services into Europe, and strengthen EU firms’ access to one of the fastest-growing large economies. For India, a major element is better access for services (notably IT and business services) and potentially easier movement of skilled professionals, subject to EU member-state visa/work-permit rules.

Beyond tariffs, both sides are reported to be working on regulatory cooperation, investment protection, geographical indications (GIs), and trade facilitation.

What this could mean If concluded, the FTA is expected to:

• open up the European goods market further to Indian exports such as apparel, pharmaceuticals, steel, petroleum products and electrical machinery;

• give EU manufacturers improved access (e.g., vehicles, medical devices, wine, spirits) in the Indian market and deeper regulatory alignment;

• strengthen bilateral investment ties, providing greater predictability for investors from both sides;

• facilitate trade in services and potentially make movement of professionals/planned mobility easier (though visa regimes remain in national hands and will be sensitive); and

• contribute to supply-chain diversification, strategic resilience and sustainability objectives for both parties.

The current phase and next steps The 14th round of negotiations concluded recently in Brussels (October 6–10) and negotiators say the outstanding issues have been trimmed. According to reports, an EU team will soon travel to New Delhi for “technical tariff negotiations”. Both sides are now said to be working with a year-end target for conclusion. Ambassador Delphin’s comments reinforce that objective.

Still, a number of sensitive issues remain: deep tariff cuts (especially in autos, dairy, agricultural products), non-tariff barriers, services access, investment treatment, regulatory convergence and sustainable development standards. Observers caution that meeting the year-end deadline will require strong political direction and flexibility from both sides.