In a significant diplomatic push, the European Union and India have agreed to intensify efforts to finalize a broad trade agreement within this year. Speaking in New Delhi, European Commission President Ursula von der Leyen affirmed her “full commitment” to the deal, stressing its immense potential given that Europe is already India’s largest trading partner, with bilateral trade reaching €120bn last year and tripling over the past two decades.
The renewed negotiations come amid heightened pressure from US President Donald Trump, who has threatened 25% tariffs on EU imports, particularly targeting the auto sector, and criticized the EU for its trade policies. The prospect of US tariffs has added urgency for the EU to secure alternative partnerships, and the trade deal with India is viewed as a strategic counterbalance.
The agreement is set to cover a wide range of issues, from reducing tariffs on European cars and spirits to addressing non-tariff barriers such as environmental and labour standards areas that have long been points of contention between the two sides. In addition, the EU is exploring a future security and defence partnership with India, similar to arrangements with Japan and South Korea, which would address common concerns like terrorism, maritime and cyber security, and the protection of critical infrastructure.
The negotiations, which resumed in 2022 after a long hiatus, have been fraught with challenges. India has previously accused Brussels of overreach, while persistent differences remain over market access. Nonetheless, senior officials from both sides have expressed optimism that the deal can be finalized within the year. Indian External Affairs Ministry official Tanmaya Lal noted that recent high-level meetings have provided clear direction, helping to set the stage for more productive discussions.
The renewed drive for an EU-India trade agreement reflects a broader effort to deepen economic ties and forge new alliances in a changing geopolitical landscape. With both parties eager to secure a deal that is both commercially meaningful and ambitious, the coming months will be crucial for resolving outstanding issues and laying the groundwork for long-term cooperation.
