On February 28, 2025, in New Delhi, Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen announced an agreement to finalize a long-pending free trade agreement by the end of this year. The leaders emphasized the importance of enhancing cooperation in trade, technology, connectivity, and defense as part of their strategic partnership.
- India and EU to finalize free trade agreement
- Cooperation in trade, technology, and defense
- EU-India partnership based on democratic values
- EU's largest trade deal potential with India
- Upcoming negotiations scheduled for March
- Significant increase in trade over the decade
Modi stated that both sides have instructed their teams to expedite the negotiations, which have faced challenges over issues like market access for cars and alcoholic beverages. The next round of talks is scheduled for March.
The trade agreement between India and the European Union is poised to be one of the largest of its kind globally. The EU is currently India’s largest trading partner, with trade between the two exceeding $130 billion in the 2023-24 fiscal year, marking a significant increase of about 90% over the past decade. Over 6,000 European companies are operating in India, highlighting the depth of economic ties.
Key points regarding the trade agreement include:
- The agreement aims to enhance market access for various products.
- Negotiations were relaunched in 2021 after a hiatus.
- Challenges have included tariffs and regulatory barriers.
During her visit, von der Leyen expressed optimism about the partnership, stating that it could define the century. She noted the need for a pragmatic approach to align priorities with current global realities, particularly in light of potential U.S. tariffs on EU goods. The EU’s commitment to this partnership is underscored by its strategic interests in cooperating with India on foreign policy, security, and technology.
The agreement between India and the EU marks a significant step towards strengthening economic ties, with both parties committed to overcoming previous obstacles. As negotiations continue, the focus will remain on achieving a mutually beneficial outcome that enhances trade and cooperation.
