India and the EU are accelerating talks for a free trade agreement, aiming to conclude it by the end of 2025. Key discussions occurred in Mumbai between Indian officials and the EU Commissioner. The two parties target enhanced economic ties amid global uncertainties, as negotiations resume for crucial trade accords. With vast trade volumes, this agreement holds potential for both regions’ economies.
India and the European Union (EU) are pushing to finalize a free trade agreement (FTA) by year-end. A meeting took place on March 1, 2025, in Mumbai between Commerce and Industry Minister Piyush Goyal and EU Commissioner for Trade Maros Sefcovic to accelerate talks toward an equitable and beneficial pact. The two parties are committed to enhancing their economic relationship.
During the meeting, Mr. Goyal expressed optimism regarding the partnership, stating that discussions concentrated on forging a mutually beneficial agreement. He highlighted the intention to bolster economic connections and enhance collaboration between India and the EU. India’s Prime Minister Narendra Modi and European Commission President Ursula von der Leyen reaffirmed their target to finalize the FTA amid increasing concerns over tariff policies from the United States.
The upcoming tenth round of negotiations is scheduled from March 10 to 14 in Brussels. Given the threat of tariff increases from the United States, strengthening trade ties between India and the EU has become even more essential. As the fastest-growing major economy, India is projected to experience a growth rate of 6.4% for 2024-25.
Negotiations, which resumed in June 2022 after an eight-year hiatus, have been driven by the EU’s demands for significant tariff cuts on automobiles and reduced taxes on wines and spirits. India aims to secure data security status to benefit its IT sector, which has been hampered by restrictions that limit the flow of sensitive information essential for industry growth.
In the fiscal year 2023-24, bilateral trade between India and the EU reached $137.41 billion, with India exporting $75.92 billion and importing $61.48 billion. The EU accounts for approximately 17% of India’s total exports and 9% of its imports. Additionally, trade in services between the two regions was estimated at $51.45 billion in 2023.
The ongoing FTA negotiations aim to enhance trade and investment, supported by concurrent discussions on investment protection and geographical indications agreements. With EU investments in India exceeding $117 billion and around 6,000 European companies operating in the country, there is significant potential for economic collaboration. Conversely, India’s investments in the EU total approximately $40 billion.
In summary, India and the EU are actively pursuing a free trade agreement with a target completion by the end of 2025. Recent meetings have emphasized the importance of this partnership, particularly in the context of fluctuating global trade dynamics. As both parties prepare for further negotiations in Brussels, the potential benefits to trade and investment are significant for both economies.
Original Source: www.thehindu.com
