India-EU Move Closer to FTA Agreement

India and the EU are significantly progressing in negotiating a free trade agreement (FTA). The two sides agreed to build a commercially meaningful trade agenda and work towards a mutually beneficial pact before the 10th round of talks.

Significant advancements have been made in the negotiations for the proposed Free Trade Agreement (FTA) between India and the European Union (EU), as outlined in an official statement released Thursday. Commerce and Industry Minister Piyush Goyal recently travelled to Brussels to meet with European Commissioner for Trade Maroš Šefčovič to assess the progress of the ongoing discussions.

"Substantial progress has been achieved on the India-EU FTA. The negotiations have advanced considerably," the statement noted, without divulging additional specifics.

During their meeting, Minister Goyal and Commissioner Šefčovič underscored the importance of establishing a commercially meaningful trade framework and pursuing a mutually advantageous trade agreement. Both leaders strategically guided their respective negotiation teams, encouraging them to accelerate efforts to finalise a comprehensive FTA addressing contemporary global economic challenges.

Negotiations for a Free Trade Agreement (FTA) between India and the European Union (EU) hinge on addressing key concerns from both sides. The EU has raised issues surrounding India’s data protection framework, intellectual property rights enforcement, and high import duties on specific European goods. Conversely, India seeks enhanced market access for its agricultural products, IT services, and skilled professionals within the EU. Adding complexity to these discussions is the shifting geopolitical landscape, shaped by the war in Ukraine and escalating tensions between the West and China, prompting India and the EU to diversify their trade and investment partnerships.

A comprehensive FTA promises to significantly increase bilateral trade and investment flows, driving economic growth and job creation in both regions. Furthermore, it could pave the way for deeper technological collaboration and innovation. Beyond financial gains, such an agreement would reinforce the strategic partnership between India and the EU, strengthening ties in a rapidly evolving global context.

This meeting is a precursor to the 10th round of negotiations between India and the European Union (EU), scheduled from March 10–14 in Brussels. During the previous ninth round, discussions addressed a broad spectrum of trade-related topics, including goods, services, investment, government procurement, and key regulatory frameworks such as rules of origin, sanitary and phytosanitary (SPS) measures, and technical trade barriers.

Negotiations between India and the EU resumed in June 2022 after an eight-year hiatus, following their suspension in 2013 due to unresolved differences on critical issues.

Bilateral trade between India and the EU reached $180 billion in the previous years. India exported $75.18 billion in goods and $31.13 billion in services to the EU, while the EU’s exports to India totalled $63.44 billion in goods and $31.35 billion in services. Furthermore, according to the Ministry of Commerce and Industry, the EU remains a significant contributor to foreign direct investment (FDI) in India, with total FDI inflows estimated at $117.34 billion.