India and the European Union Resume Trade Talks in Brussels

New Delhi, 10 March 2025.

India and the European Union (EU) are set to hold the next round of negotiations on a trade agreement in Brussels from Monday to Friday, as both sides push to finalize a comprehensive deal by the end of this year. The discussions come at a crucial time, with increasing geopolitical tensions and potential tariff revision from U.S. adding urgency to the talks.

The President of the European Commission, Ursula von der Leyen, shakes hands with Indian Prime Minister Narendra Modi during her visit to New Delhi.

Reviving a Stalled Trade Partnership

Negotiations for an India-EU trade agreement were initially launched in 2007 but stalled after 16 rounds of discussions failed to produce an agreement by 2013. Key sticking points included tariffs, market access, and regulatory standards. However, both sides revived negotiations in June 2022, recognizing the strategic and economic importance of deepening their trade ties.

PM Modi and European Commission President Ursula von der Leyen had agreed to expedite the conclusion of the India-EU free trade agreement (FTA) by the end of the year at their meeting in Delhi last month.

“A free trade agreement between the EU and India would be the largest deal of this kind anywhere in the world. I am well aware it will not be easy. But I also know that timing and determination count and that this partnership comes at the right moment for both of us,” Von der Leyen, said during her two-day visit to India.

Why the Deal Matters

The EU is India’s largest trading partner, accounting for 124 billion euros of trade in goods in 2023, or 12.2 per cent of total Indian trade. Trade in services between the EU and India reached nearly 60 billion euros in 2023, almost double the level in 2020. A third of that were digital services, according to figures compiled by the World Economic Forum.

A successful trade agreement would significantly boost economic relations between India and the EU, which is already India's second-largest trading partner. The deal aims to lower trade barriers, enhance market access for goods and services, and promote investment in sectors such as technology, pharmaceuticals, and renewable energy. It could also help both parties reduce their reliance on China amid shifting global supply chains.

Challenges and Strategic Considerations

While both sides are committed to reaching an agreement, several challenges remain. India seeks better access to the EU market for its IT services, textiles, and agricultural products, while the EU is pushing for lower tariffs on industrial goods, stronger intellectual property rights, and commitments on labor and environmental standards.

Additionally, global uncertainties—ranging from the Russia-Ukraine conflict to potential changes in U.S. trade policies under a possible Trump return—are influencing the pace and urgency of the negotiations. With rising protectionist trends worldwide, securing a trade deal could provide economic stability and resilience for both India and the EU.

Looking Ahead

As discussions continue this week in Brussels, negotiators face the challenge of balancing economic ambitions with political realities. If successful, the India-EU trade agreement could mark a new era of cooperation, strengthening their economic and geopolitical partnership in an increasingly volatile global landscape.

With both sides eager to conclude negotiations by year-end, the coming months will be critical in determining whether this long-awaited deal finally comes to fruition.