EU and India hope to conclude a free trade agreement by the end of 2025
In the face of the US trade war, the European Union is relaunching negotiations to find new economic partners. On 2 May, Brussels and New Delhi reaffirmed their commitment to finalise the long-awaited free trade agreement by the end of the year.
As the US tightens its trade policy, increasing tariff barriers, the European Union seeks to forge new alliances. Pressed to become the third world power by 2027 behind the United States and China, India appears as a strong partner (cf. India: Soon to be the third largest economic power in the world?). On 2 May, EU Trade and Economic Security Commissioner Maros Sefcovic and Indian Trade and Industry Minister Piyush Goyal met in Brussels to discuss the progress of the EU-India Free Trade Agreement (FTA), reaffirming the willingness to conclude a pact before the end of 2025. A commitment already made by the President of the European Commission, Ursula von der Leyen, and the Indian Prime Minister, Narendra Modi, on 28 February.
Launched in 2021 after a suspension of almost a decade (cf. EU FTA / India: Trade negotiations resume), the FTA talks between Brussels and New Delhi cover a wide range of topics: tariff reduction, open public procurement, investment, services, technical standards and sustainability. The Twenty-Seven would like to see India's particularly high tariff barriers on industrial products, in return for better access to the European market for digital services and agri-food products.
Remember that the EU is India's leading trading partner, ahead of the US and China. In 2023, trade in goods and services between the two sides amounted to EUR 184 billion, but the potential remains considerable, with India accounting for only 2.2% of EU merchandise trade, of which India is the tenth partner. Brussels sees new opportunities in the Indian market, notably for the sale of cars, agricultural products, wine and spirits.
The next round of negotiations is scheduled to take place in New Delhi from 12 to 16 May.
However, if an agreement is indeed finalized in the coming months, it will still have to be signed by the 27 Member States before any entry into force, which may prove to be a long time.
India seems to be at the heart of all lusts since the United Kingdom has finally reached an agreement with India yesterday, Tuesday, May 6, 2025, after years of negotiations (cf. United Kingdom / India: Resuming Free Trade Agreement Negotiations). We will come back in more detail on this new agreement between London and New Delhi in the next edition of our Regulatory Watch Letter.
ACTE International Network