India is moving closer to sealing a free trade agreement (FTA) with the European Union, Commerce Minister Piyush Goyal said Tuesday, noting that around two-thirds of the deal’s chapters have already been finalized.
Progress Ahead of Talks
Goyal’s comments come just before EU Trade Commissioner Maros Sefcovic and Agriculture Commissioner Christophe Hansen arrive in India on September 12 for another round of negotiations. “By the time my counterparts come to India, I think we will be quite set to try and conclude the agreement substantially,” Goyal said.
Talks between the two sides were relaunched in 2021 after years of deadlock, with the goal of finishing by the end of 2025. EU negotiators have already landed in Delhi to prepare for discussions, while a 28-member EU Political and Security Committee delegation also arrived to engage on defense and security matters ahead of next year’s EU-India Summit.
The trade talks unfold against heightened global tension. President Donald Trump has urged EU leaders to impose tariffs of up to 100% on India and China for continuing to buy Russian oil, after the U.S. raised tariffs on Indian goods to 50%. Washington has tied these measures to India’s ongoing transactions with Russia amid the Ukraine war.
Meanwhile, the EU has been reducing reliance on Russian energy but still imports about 19% of its natural gas from Russia. A fresh sanctions package could impact Russian oil refined in India, raising potential points of friction.
Trade and Security Engagement
Despite these challenges, India and the EU are advancing cooperation. Naval forces from both sides recently held their first coordinated exercise in the Indian Ocean, underscoring growing security collaboration. Alongside the FTA, EU officials are expected to discuss India’s potential role in mediating the Russia-Ukraine conflict.
The stakes are high: the EU remains India’s largest trading partner in goods, with bilateral trade reaching $135 billion in 2022–23, nearly double what it was a decade ago. Over 6,000 EU companies operate in India.
India has also signed a $100 billion trade agreement with the European Free Trade Association after 16 years of negotiations, and its FTA with the UK took effect in July. EU Commission chief Ursula von der Leyen said earlier this year she expects the India-EU deal to be the largest of its kind globally once finalized.
Author’s Opinion
The India-EU trade deal could become a defining milestone for both economies, but the timing is precarious. Trump’s push for heavy tariffs on India adds another layer of uncertainty, especially with global markets already strained by war and sanctions. While the EU offers India enormous trade opportunities, the country’s insistence on securing cheap oil for its people will keep it walking a tightrope. The success of this deal may depend less on economics and more on whether New Delhi can shield its trade agenda from global power struggles.
Featured image credit: Ali Mkumbwa via Unsplash
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