India Edges Closer to Free Trade Deal with European Union
India is moving closer to finalizing a free trade agreement (FTA) with the European Union, Commerce Minister Piyush Goyal confirmed this week. His comments come ahead of fresh negotiations in New Delhi, set to begin on September 12 with senior EU trade officials.
Strong Progress on Talks
Goyal said that about 60 to 65 percent of the agreement has already been settled, raising hopes that the deal could be substantially concluded by the end of the year.
“With EU trade commissioner Maroš Šefčovič and agriculture commissioner Christophe Hansen arriving soon, I expect we will be well-prepared to move the agreement forward in a big way,” the minister said.
EU officials arrived earlier this week to prepare for the talks, while a 28-member Political and Security Committee (PSC) delegation also reached Delhi to discuss foreign policy, defense, and security issues ahead of next year’s EU-India Summit.
Expanding Strategic Partnership
India and the EU recently conducted their first coordinated naval exercise in the Indian Ocean, underscoring growing cooperation on maritime security. Alongside trade negotiations, PSC officials are also expected to hold talks on India’s potential role in easing tensions in the Russia-Ukraine conflict.
The discussions come at a critical time. Ukraine has just endured its heaviest aerial bombardment since the war began, including a missile strike on Kyiv’s main government building. Meanwhile, Poland confirmed that it had shot down Russian drones entering its airspace—the first such direct confrontation for a NATO member since 2022.
Trump’s Call for Tariffs on India and China
Global geopolitics added another twist as US President Donald Trump urged the EU to impose tariffs of up to 100 percent on India and China, accusing both countries of helping Russia’s economy by continuing to buy its oil.
Washington has already introduced a 50 percent tariff on Indian goods, with an additional 25 percent linked to transactions involving Russia.
US Treasury Secretary Scott Bessent has said America is ready to increase pressure on Moscow but stressed the need for stronger European cooperation.
The EU has pledged to reduce reliance on Russian energy, yet nearly one-fifth of its natural gas imports still come from Russia. A new sanctions package is also being prepared, which could hit Russian oil refined in India.
India’s Position on Energy Imports
India has defended its energy policy, insisting it will purchase oil “wherever the best deal is available” to protect the needs of its 1.4 billion people. New Delhi has repeatedly stressed that affordability and energy security guide its decisions, despite pressure from Western allies.
Trade and Investment Ties
Despite disagreements over energy, India and the EU remain committed to expanding trade ties. The EU is India’s largest trading partner in goods, with bilateral trade valued at $135 billion in 2022–23, nearly double what it was a decade ago. Roughly 6,000 European companies are currently active in India.
This push also follows India’s successful signing of a $100 billion FTA with the European Free Trade Association (EFTA) after 16 years of negotiations. Separately, the India-UK trade deal officially came into effect this July.
European Commission President Ursula von der Leyen has previously said she expects the EU-India FTA to be completed by the end of this year, calling it the largest trade agreement of its kind worldwide.