India and EU Commit to Finalizing Free Trade Agreement by Year-End
India and the European Union (EU) have committed to finalizing a long-pending free trade agreement (FTA) by the end of this year, aiming to enhance cooperation in trade, technology, connectivity, and defense. This decision was announced during a meeting in New Delhi between Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen. The proposed FTA is poised to be one of the largest of its kind globally, reflecting the deepening strategic partnership between India and the EU.
The EU currently stands as India’s largest trading partner, with bilateral trade in goods reaching approximately $137.5 billion in the 2023-24 fiscal year, marking a 90% increase over the past decade. Both parties have directed their respective teams to expedite negotiations, with the next round scheduled for March. The EU is particularly interested in reducing tariffs on imports such as automobiles, alcoholic beverages, and dairy products, while India seeks greater access for its pharmaceuticals, textiles, and agricultural products in the European market.
This renewed commitment to the FTA comes in the context of potential global trade challenges, including proposed tariffs by the United States on goods from both the EU and India. By strengthening their economic ties, India and the EU aim to mitigate the impact of such external trade pressures and promote a rules-based multilateral trading system.
In addition to trade, the discussions between Modi and von der Leyen encompassed collaboration in areas such as clean energy, digital transformation, and defense cooperation. Both leaders emphasized the importance of a pragmatic and ambitious approach to realign their partnership in line with current global realities.
As negotiations progress, stakeholders from various sectors are keenly observing the developments, anticipating that the FTA will open new avenues for investment, innovation, and economic growth in both regions.
