New Delhi: India and the European Union have entered a decisive phase in their long-running trade negotiations, aiming to finalize a wide-ranging Free Trade Agreement (FTA) by the end of this year. Both sides see the pact as strategically vital, not only for economic cooperation but also for strengthening their positions in an increasingly turbulent global order.
After years of stalled progress, the talks gained renewed momentum in 2022. Now, negotiators have successfully closed 11 out of 23 chapters covering areas such as customs procedures, digital trade, intellectual property rights, subsidies, competition law, dispute settlement, and anti-fraud measures. Despite these advances, several critical issues remain unresolved, leaving negotiators racing against time.
One of the toughest sticking points lies in market access. India has firmly resisted opening its agricultural and dairy sectors, citing the need to protect millions of farmers whose livelihoods remain vulnerable. On the other hand, the EU continues to push for greater access to India’s markets for automobiles and alcoholic beverages. Non-tariff barriers also loom large in the talks, with disputes over rules of origin, food safety standards, labor conditions, environmental obligations, and India’s strict quality control measures, which Brussels sees as restrictive.
The negotiations are also shaped by broader geopolitical considerations. India’s rising imports of discounted Russian oil have led to U.S. backlash in the form of stricter tariffs, pushing New Delhi to diversify trade relationships further. For its part, the EU has voiced concern over India’s energy choices, while its new carbon border adjustment mechanism is another source of friction. India perceives the mechanism as protectionist, though the EU has signaled limited flexibility in its implementation.
Despite these challenges, political leaders on both sides remain determined. Prime Minister Narendra Modi and European Commission President Ursula von der Leyen have reaffirmed their commitment to close the deal this year. High-level delegations, including the EU’s Agriculture Commissioner and Trade Commissioner, are already in India for sustained discussions, with the EU’s Political and Security Committee expected to join the talks soon.
If the FTA is finalized, it would mark a turning point in India-EU relations. The agreement could boost India’s integration with Western economies, give Europe a stronger economic foothold in Asia, and reinforce the EU-India Strategic Partnership at a time when global trade is increasingly influenced by geopolitics. Still, much depends on whether negotiators can bridge the remaining divides before the looming year-end deadline.