India and the European Union are making significant progress towards concluding a free trade agreement by the end of 2025, with Prime Minister Narendra Modi announcing that his government is working towards striking a mutually beneficial deal.
The European Union (EU) and India are making significant progress in their efforts to conclude a free trade agreement by the end of 2025. ‘mutually beneficial’ deal with the EU.
The India-EU trade pact, also known as the EU-India Free Trade Agreement (FTA) , aims to strengthen economic ties between the European Union and India.
Negotiations for the pact began in 2007 and were concluded in 2018.
The agreement covers areas such as goods, services, investment, intellectual property rights, and dispute settlement.
It is expected to increase trade between the two regions by 10% annually, benefiting over 1 billion people.
Key sectors include textiles, pharmaceuticals, and automobiles.
During a visit by EU Commission President Ursula von der Leyen, Modi stated that New Delhi and Brussels are aiming to finalize a bilateral free trade agreement by the end of this year. Von der Leyen’s trip to India was seen as an opportunity for both parties to boost economic ties ahead of possible US tariffs.
The EU has been actively seeking to strengthen its partnership with India, which is considered one of the defining partnerships of this century. Von der Leyen emphasized that a closer relationship between the two blocs can help them navigate increasing global competition and promote cooperation in various areas.
The India-EU partnership has been gaining momentum since the signing of the Strategic Partnership in 2004.
The EU is one of India's largest trading partners, with bilateral trade valued at over $120 billion.
India is also a key player in the EU's Asia strategy.
Key areas of cooperation include climate action, clean energy, and digital economy.
In recent years, the partnership has expanded to cover new sectors such as artificial intelligence, cybersecurity, and space exploration.
‘We both stand to lose from a world of spheres of influence and isolationism. And we both stand to gain from a world of cooperation and working together,’ von der Leyen said during her speech ahead of her meeting with Modi.
The India-EU cooperation has been growing steadily over the years, with a focus on trade, technology, and sustainable development.
The EU is one of India's largest trading partners, with bilateral trade valued at over $120 billion in 2020.
The two sides have also strengthened their collaboration in areas like renewable energy, climate change, and cybersecurity.
In 2016, the EU and India launched the 'EU-India Agenda for Change', a strategic partnership aimed at promoting sustainable development, good governance, and people-to-people ties.
The EU is also considering a potential defense and security partnership with India, similar to deals struck with Japan and South Korea. This move comes as the bloc seeks to diversify its supply chains and reduce its reliance on China.
India’s stance on the war in Ukraine has been distinct from that of the EU, but von der Leyen’s visit aims to strengthen ties between the two parties. The EU commission chief paid her respects at the Rajghat memorial to Indian independence leader Mahatma Gandhi during her visit to New Delhi.
The next round of negotiations between India and the EU is scheduled for March. Earlier talks have been hampered by disagreements over intellectual property protections and market access for certain products, including cars and alcoholic beverages. However, both parties appear committed to resolving these issues and concluding a mutually beneficial trade agreement by the end of 2025.
The signing of a trade agreement with the European Free Trade Association (EFTA) last year has provided a boost to India’s efforts to strengthen its economic ties with Europe. The agreement with EFTA comprises Iceland, Liechtenstein, Norway, and Switzerland, none of which are EU member states.
