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The idea of an interim trade deal between India and with the European Union (EU) before the two finalise a full-fledged free trade agreement (FTA) is back on the table. According to sources, both sides are keen to get some kind of an agreement done before the end of the year due to the uncertain global trade environment.
Talks Progress and Ministerial Push
While the 13th round of negotiations was completed in New Delhi on Friday, with the interim deal on the agenda, the next round will be held in Brussels from October 6th to October 10, a senior official said. “Negotiations are in a sweet spot and options remain open for an early harvest deal,” the official added.
The model of staggered trade agreement has already been pursued by New Delhi in talks with Australia and the US.
India and EU completed 13th round of negotiations in New Delhi on Friday where during their 5-day schedule top ministers were on a standby to guide the negotiations.
“Significant convergence was achieved in many areas during the 13th round of talks. During the 5-day schedule, top ministers were on a standby to guide the negotiations,” another official said.
EU Trade Commissioner Maros Sefcovic and Agriculture Commissioner Christophe Hansen had arrived in New Delhi a day before the conclusion of talks and engaged with Commerce and Industry Minister Piyush Goyal. The ministers from both sides also addressed negotiators from both sides.
The deadline was set in February by European Commission President Ursula von der Leyen and Prime Minister Narendra Modi when the entire college of commissioners of the EU had visited India.
Key Issues and Market Access
“Earlier Goyal had said that India and the EU will conclude their FTA negotiations “quite substantially” by the end of the 13th round. He had also said that both sides have finalised 60-65% of the chapters of the FTA.
The India-EU FTA negotiations re-started in June 2022. The FTA covers 23 policy areas or chapters, including Trade in Goods, Trade in Services, Investment, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Trade Remedies, Rules of Origin, Customs and Trade Facilitation, Competition, Trade Defence, Government Procurement, Dispute Settlement, Intellectual Property Rights, Geographical Indications, and Sustainable Development.
The FTA is crucial as the 27-member bloc is the biggest trading partner of India with bilateral merchandise trade at $ 136.2 billion, though the US remains the biggest market. Exports from India stood at $ 75.8 billion while imports were $ 60.6 billion in 2024-25. Both sides also have a very robust services trade too which stood at $ 70 billion in 2023. India has a surplus of $ 9.25 billion.
Through this agreement India is seeking preferential access to its labour intensive exports like textiles and apparel, leather and other products like machinery, chemicals, pharma and metals. It is also seeking relaxation of visa norms for temporary workers for smoother delivery of services.
India is also seeking a carve out for its steel and aluminium exports from the carbon tax imposed through Carbon Border Adjustment Mechanism (CBAM). The tax will be collected from January next year. Its trade agreement with the US, the EU has granted this exemption for American exports of the products covered by CBAM.
The EU is seeking greater opening of the Indian market for its auto sector, wines and spirits, agriculture products like meat and poultry.
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