What happened?
India and the European Union (EU) are considering a phased approach to finalise their long-pending Free Trade Agreement (FTA), aiming to conclude it by the end of 2025. The strategy would allow both sides to first settle less contentious issues, while deferring complex matters such as tariffs on automobiles, alcohol, and intellectual property rights.
This development follows a 28 February 2025 meeting between Prime Minister Narendra Modi and European Commission President Ursula von der Leyen, where they reaffirmed commitment to the deal. The 10th round of FTA talks was held in Brussels last month, with the next round scheduled for May in India.
Why it matters to India
A phased FTA could accelerate progress on a pact that has been in negotiation for over a decade, helping both sides respond to rising global protectionism, particularly from the U.S. The EU is India’s largest goods trading partner, with bilateral trade valued at over USD 137 billion in 2023–24.
Stronger India-EU trade ties would boost export competitiveness, attract investments, and support India’s goal of diversifying its global trade partnerships. It also complements India’s recent deal with the European Free Trade Association (EFTA), which promises USD 100 billion in investments and lower tariffs on key European exports.