EU and India push to finalize free trade deal this year
EU and India strengthen ties in trade, technology, and defense
European Commission President Ursula von der Leyen said Friday that the EU and India aim to finalize a long-delayed free trade agreement (FTA) by year-end.
Speaking in New Delhi ahead of her meeting with Indian Prime Minister Narendra Modi, von der Leyen emphasized the urgency of aligning priorities to address current global realities. “It is time to be pragmatic and ambitious. And to realign our priorities for today’s realities,” she said, underlining the importance of the deal, reports The Associated Press.
India and the EU revived discussions on the agreement in 2021, but market access issues — including tariffs on automobiles and alcoholic beverages — have remained sticking points. The next round of negotiations is set for March.
Strengthening Trade, Technology, and Defense Ties
Beyond trade, the EU and India aim to deepen collaboration across technology, connectivity, and defense. The European Union is India’s largest trading partner, surpassing the U.S. and China.
Bilateral trade reached more than $130 billion in the 2023–24 fiscal year, representing a 90% increase over the past decade. Over 6,000 European companies currently operate in India, underscoring the economic significance of their relationship.
The strategic importance of the deal has grown as the EU seeks to strengthen ties with India in the face of rising global trade tensions. U.S. President Donald Trump’s recent announcement of 25% tariffs on EU goods has spurred Brussels to accelerate efforts to secure favorable terms with New Delhi.
Implications for Global Trade and Investment
India has also been expanding its trade partnerships. Last year, it signed a trade agreement with the European Free Trade Association (EFTA) nations — Iceland, Liechtenstein, Norway, and Switzerland — which includes a $100 billion investment commitment across industries like pharmaceuticals, machinery, and manufacturing.
As von der Leyen stated, the EU and India have the potential to form one of the defining partnerships of this century. “I want this visit to be the start of this new era,” she said. “Prime Minister Modi and I share the same view. It is time to take our EU-India Strategic Partnership to the next level.”
Recently we wrote, that Aiman Ezzat, CEO of Capgemini, one of Europe's largest IT services firms, expressed concern over the European Union's approach to artificial intelligence regulation, claiming that the EU has overstepped in its efforts.
