India and EU Intensify Discussions to Accelerate Free Trade Agreement Negotiations
India and the EU are intensifying discussions to finalize a free trade agreement by year-end 2025, focusing on establishing balanced trade relations amidst global economic uncertainties. The negotiations followed a long hiatus and aim for significant tariff cuts and enhanced market access, with both regions poised to benefit substantially from increased trade and investment opportunities.
On March 1, 2025, Indian Commerce and Industry Minister Piyush Goyal and EU Commissioner for Trade and Economic Security Maros Sefcovic held discussions in Mumbai aimed at accelerating the free trade agreement (FTA) negotiations between India and the European Union (EU). With a deadline set for year-end, the talks were pivotal in seeking a balanced and mutually beneficial pact that would deepen economic ties and foster collaboration between the two regions.
Prime Minister Narendra Modi and European Commission President Ursula von der Leyen had previously emphasized their commitment to finalizing this long-anticipated trade deal amidst escalating concerns regarding U.S. tariff policies. The two sides are scheduled to commence the tenth round of negotiations from March 10-14 in Brussels, underscoring the urgency of reaching an agreement amidst global economic uncertainties.
The renewed negotiations, which resumed in June 2022 after an eight-year hiatus, aim for significant duty reductions in automobiles, tax cuts for wines and spirits, and robust intellectual property protections. Successful agreement on these aspects is expected to enhance the competitiveness of Indian exports, such as pharmaceuticals and garments, in the EU market, which is critical for India’s trade interests.
India is also advocating for data security status to facilitate information flow crucial for its IT sector. In the fiscal year 2023-24, bilateral trade in goods reached $137.41 billion, with the EU being India’s largest goods trading partner, representing about 17 percent of India’s total exports. Additionally, trade in services reached approximately $51.45 billion, further highlighting the importance of the EU as a trade partner.
The proposed agreement also aims to strengthen investment protection and geographical indications. As of now, EU investments in India exceed $117 billion, with considerable European corporate presence, while Indian investments in the EU total approximately $40 billion, signifying a robust trade relationship that is poised for expansion.
In conclusion, India and the EU are actively engaged in negotiations to conclude a significant free trade agreement by the end of 2025. The discussions focus on reducing tariffs, enhancing market access, and facilitating investments, reflecting the critical role of this partnership amidst global economic challenges. Both sides are committed to strengthening their economic ties, which hold substantial potential for mutual growth and development.
Original Source: www.thehindu.com
