New Delhi: The conclusion of the prolonged negotiations for a free trade pact between India and the European Union is expected to be announced on Tuesday, January 27.
European Council President Antonia Costa and European Commission President Ursula von der Leyen could meet Indian Prime Minister Narendra Modi, following the announcement. Leyen also co-chaired an India-EU summit from January 25 to 28 during his India visit, one of the Indian government sources said.
If the pact is finalised, then it will boost Indian exports such as jewellery and textiles because the tariffs will be reduced on the expanded market for Indian electronics, textiles, and chemicals.
The negotiations were reinstituted in 2022, after a nine-year pause, gaining traction last year amid rising trade tensions.
Von der Leyen indicated advancement in the trade deal as he stated that the European Union is close to concluding the agreement but acknowledged that additional work remains at the World Economic Forum in Davos on Tuesday.
The announcement came after the EU signed a pivotal deal with the South American bloc Mercosur, and last year they signed pacts with Indonesia, Mexico and Switzerland.
Concurrently, New Delhi concluded agreement with Britain, New Zealand, and Oman.
India and the EU bilateral trade totalled $136.5 billion in the 2024/25 fiscal year ending March, and this was India’s biggest trade, and the EU became India’s biggest trading partner. “Negotiators are still trying to bridge differences on several sensitive issues, including India’s reluctance to sharply cut tariffs on auto imports,” an EU government source said.
Indian and EU government sources declined to be identified, as the matter is not yet public. India’s commerce ministry did not immediately respond to an email requesting comment.
“An India-EU FTA would cut tariffs on textiles, garments and leather, letting Indian exporters compete more evenly with Bangladesh and Vietnam,” Ajay Srivastava, founder of the Delhi-based think tank Global Trade Research Initiative, stated.
The duty-free access to the EU will offset the losses for Indian textile industries and jewellery exporters in the US.