*EU Urges India to Cut Tariffs on Cars and Wine to Boost Trade Relations*
The European Union is set to press India to lower its high tariffs on key imports such as cars and wine in an effort to enhance trade relations, as the bloc seeks to diversify its economic dependencies and reduce reliance on China. The push comes ahead of European Commission President Ursula von der Leyen’s two-day visit to New Delhi, where she is expected to hold discussions with Indian Prime Minister Narendra Modi and Trade Minister Piyush Goyal.
A senior EU official, speaking on condition of anonymity, stated that India’s market remains relatively closed to certain European goods of commercial interest, including automobiles, wines, and spirits. The EU’s demand for tariff reductions aligns with ongoing free trade agreement (FTA) negotiations, with the next round scheduled for March 10-14 in Brussels. The bloc is also reportedly offering flexibility on agricultural trade issues to facilitate progress in the talks.
The visit coincides with heightened geopolitical tensions, with the EU looking to bolster economic and security cooperation with India under their strategic partnership. As part of its "de-risking" strategy, the EU aims to strengthen ties with India to diversify supply chains and reduce dependence on Chinese products. Additionally, discussions may include security collaborations on issues such as cyber threats and regional tensions in the Indo-Pacific.
Leyen is also expected to seek India’s backing for a "peaceful and just deal" regarding Ukraine’s security. Reports indicate that the two sides may sign an agreement to share classified security information to address common threats, including cyberattacks and terrorism.
The EU remains India's largest trading partner in goods, with bilateral trade reaching nearly $126 billion in 2024, a 90% increase over the past decade. However, analysts remain cautious about the immediate impact of the visit. Trade expert Ajay Srivastava, founder of the Delhi-based Global Trade Initiative, emphasized that for meaningful progress, the EU must recognize India as a data-secure country.
Despite shared concerns about China, analysts suggest that India and the EU have different geopolitical priorities. While India remains focused on its border tensions with China, the EU’s concerns are centered on the Russia-Ukraine conflict and NATO-related matters.