The European Union and India are set to announce a long-awaited trade agreement after nearly two decades of intermittent negotiations, as both sides seek to strengthen economic and strategic ties amid rising trade tensions with the United States.
Negotiations Concluded Ahead Of Delhi Visit
India’s Commerce Secretary Rajesh Agarwal said on Monday that negotiations had been completed and the agreement finalized. The announcement is expected in New Delhi, where Ursula von der Leyen and António Luís Santos da Costa are currently visiting.
Von der Leyen and Costa arrived in Delhi over the weekend and served as chief guests at India’s Republic Day celebrations on Monday. They are scheduled to meet Prime Minister Narendra Modi on Tuesday during a bilateral summit, after which the deal is expected to be formally announced.
Broader Geopolitical Context
The agreement comes as both India and the EU face economic and political pressure linked to U.S. trade policy. India is dealing with 50% tariffs imposed last year by U.S. President Donald Trump, even as talks on a separate U.S.-India trade deal continue without resolution.
The EU has also faced recent strain after Trump threatened to escalate trade measures against European allies over opposition to a proposed U.S. takeover of Greenland, before later reversing course.
Costa said the deal would send an “important political message” that India and the EU favor trade agreements over tariffs, at a time when protectionist measures are increasing globally. Von der Leyen said Europe and India are “committed to working together to shape a new global order.”
Scope And Economic Significance
The agreement is expected to expand market access for Indian exports to Europe and ease the entry of European goods and investment into India, including automobiles and beverages.
Modi said the agreement represents cooperation between two major global economies, adding that the partnership accounts for roughly 25% of global GDP and one-third of global trade.
The EU is India’s largest trading partner in goods. Bilateral merchandise trade reached $136 billion in the 2024–25 financial year, nearly double the level recorded a decade earlier.
Timeline And Approval Process
While the announcement is imminent, formal signing is expected later this year. The agreement will still require approval from the European Parliament and the European Council before it can come into force.
Long Negotiation History And Key Issues
Trade talks between India and the EU began in 2007 but stalled in 2013 over disagreements on market access and regulatory standards. Negotiations were formally revived in July 2022.
Key sticking points included access to India’s automobile and agricultural markets, as well as carbon-related tariffs. Analysts are expected to closely examine the final text to assess how these issues were resolved.
Officials from both sides worked in recent days to close remaining chapters of the agreement ahead of the EU leaders’ visit.
Recent Trade Activity On Both Sides
The deal comes amid broader efforts by both parties to diversify trade relationships. In the past seven months, India has signed trade agreements with the UK, Oman, and New Zealand, and a 2024 agreement with the European Free Trade Association bloc has entered into force.
The EU, meanwhile, concluded a trade agreement with the South American bloc Mercosur earlier this month, ending a negotiation process that lasted 25 years.
Featured image credits: PxHere
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