September 16, 2025

Get ready for some international firangi dhamaka! India and the European Union (EU) look set to wrap up their Free Trade Agreement (FTA) talks by the end of the year. This comes at a time when US tariffs under President Donald Trump are shaking up trade rules worldwide, pushing India and the EU to form stronger, more stable partnerships. European Trade Commissioner Maros Sefcovic said during his India visit, "We are now maximizing our efforts to finalize negotiations by the end of the year." Indian Commerce Minister Piyush Goyal also chimed in, "India and the EU complement each other and offer great opportunities on both sides." Agriculture is a hot topic here, with EU's Agriculture Commissioner Christophe Hansen saying they're focused on "a balanced EU-India FTA that delivers for people, farmers and businesses on both sides."     The talks were restarted in 2022 after a long gap since 2013 and so far have seen 13 intense rounds, with the 14th planned for October in Brussels. What’s driving this push? Well, US tariffs are hurting Indian exports big time. The US slapped a whopping 50% tariff on many Indian goods, including a heavy 25% penalty for India still buying Russian oil. Nearly half of India’s $87 billion annual exports to the US might be affected! EU expert Gulshan Sachdeva from Jawaharlal Nehru University warns, "India-EU trade deal is not done until it is truly done," showing cautious optimism. India wants tariff-free access to Europe to boost its exports and reduce risk from the US market. The EU gains too — by diversifying supply chains and boosting trade in high-tech and agriculture. Former diplomat Anil Wadhwa points out that US tariffs have eroded trust and made India look for new friends, saying, "Indian labor-intensive industries also need an outlet... and there is a lot to gain from the India-EU trade relationship." For the EU, India is attractive because of its large market, democratic setup, and shared views on data and AI. European Commission President Ursula von der Leyen’s February visit injected urgency into talks, urging both sides to "take their partnership to the next level" for security and prosperity. German Foreign Minister Johann Wadephul's recent visit added even more fuel to the fire. Yet, challenges remain. Europe wants lower tariffs on vehicles, wine, spirits, and dairy. India wants a bigger share for textiles, medicines, steel, and petroleum. The EU’s new Carbon Border Adjustment Mechanism (CBAM), a carbon tax on certain imports, is another tricky point—India worries about unfair penalties on its exporters. But experts expect breakthroughs soon, especially in the automobile sector where European cars might enter India easily while Indian firms get fair play in Europe for parts. With US President Trump urging even harsher tariffs recently, both India and the EU feel a strategic need to wrap up the deal quickly. Mohan Kumar, former envoy to France, says, "There is strategic convergence between the two players to get the FTA done before the end of this year." So, keep your eyes peeled as this India-EU trade saga races toward a high-stakes finish. A new chapter in global trade might just be opening!

Read More at News →

Tags: India-eu fta, Trade agreement, Us tariffs, Maros sefcovic, Piyush goyal, Indo-european trade,