India and EU Set to Finalize Historic Free Trade Agreement
Significant Trade Agreement on the Horizon
New Delhi, January 20: India is on the verge of concluding a significant free trade agreement (FTA) with the European Union (EU), with an official announcement anticipated on January 27, just after the Republic Day festivities, which will see top EU officials as chief guests.
Sources indicate that the upcoming India-EU summit on January 27 will mark the successful end of FTA negotiations. Both parties are expected to adopt a document confirming the conclusion of these talks, which will then proceed through the necessary legal processes and await ratification by the European Parliament and Council.
Additionally, both sides are likely to establish a security and defense partnership and a framework to facilitate the mobility of Indian professionals seeking employment in the EU.
European Council President Antonio Costa and European Commission President Ursula von der Leyen will attend India’s 77th Republic Day celebrations as chief guests before co-chairing the summit.
For the first time, a military contingent from the EU will participate in the Republic Day parade, symbolizing the strengthening strategic ties between the two entities.
This trade agreement is poised to be the largest India has ever signed, encompassing goods and services with the 27-member European Union, a key destination for Indian exports. Commerce Minister Piyush Goyal has referred to it as the 'mother of all deals' to emphasize its importance.
With a combined population of nearly two billion, this agreement will connect two of the world’s largest democratic economies amidst global economic challenges stemming from US tariff issues and geopolitical tensions.
The EU stands as India’s largest trading partner, with goods trade reaching $135 billion in FY24. The FTA is expected to provide enhanced market access and economic synergies. However, discussions continue regarding sensitive topics, including the EU’s Carbon Border Adjustment Mechanism (CBAM).
India is advocating for zero-duty access for its labor-intensive sectors, including textiles, leather, apparel, gems and jewelry, and handicrafts.
Last week, Commerce Minister Piyush Goyal announced that negotiations for the trade agreement with the EU have reached their final stages.
Earlier this month, the minister visited Brussels for high-level discussions with the EU Trade and Economic Security Commissioner, Maros Sefcovic, aimed at securing a mutually beneficial FTA.
“During our discussions, we covered essential aspects of the proposed agreement. We reiterated our commitment to a rules-based trading framework and a modern economic partnership that protects the interests of farmers and MSMEs while integrating Indian industries into global supply chains,” Goyal stated.