In a policy brief titled The time is right to make a European Union–India trade deal happen, published by Bruegel (2025), authors Ignacio García Bercero and André Sapir analyse the prospects of a comprehensive EU–India free trade agreement (FTA) almost twenty years after negotiations first started. The current geopolitical climate, along with a rise in high-level engagements, including between Prime Minister Narendra Modi and European Commission President Ursula von der Leyen in February 2025, has resulted in the most favourable conditions yet to secure a successful trade deal by the end of this year.
Today, both the EU and India rank among the world’s five largest economies in terms of GDP and, in the ongoing geopolitical climate, both pursue strategic autonomy and economic security. Moreover, India’s rapid growth over the past three decades has outpaced China and elevated its position as a major economic actor, bringing India closer to the EU as its largest trading partner in 2024.
For the EU, India’s size, its demographic potential, and growing geopolitical importance make it central to European efforts, particularly as Europe aims to secure its supply chains and diversify away from China and an increasingly protectionist United States. It is against this backdrop that both sides aim to secure an ambitious deal that can serve as a pillar of a modernised strategic partnership. This was also reflected in May 2025 in the India–United Kingdom free trade agreement, which serves as a clear benchmark of the tangible outcomes such cooperation can produce.
But as Bercero and Sapir highlight in the brief, challenges have continued to persist, especially in negotiations on tariff liberalisation, services access, standards, digital trade, and sustainability. The authors contend that both sides must learn from the stalled engagements from 2007 to 2014, particularly on sensitive issues such as automotive tariffs and regulatory cooperation. The post-2021 period thereby saw a shift marked by the creation of an EU–India Trade and Technology Council and renewed strategic dialogue, reflecting a recognition that both sides should engage, as failing to adapt to global turbulence carries high costs. In 2025, the central issues have centred on reducing India’s high industrial tariffs, addressing climate-related measures such as the EU’s Carbon Border Adjustment Mechanism (CBAM), along with coordination on reduced trade diversion for the EU and greater export-oriented investment for India.
The brief also underscores the wider strategic implications of a successful EU–India FTA. For India, it means deeper engagement with the EU and evolving its ties with the United States, while rebalancing its bilateral trade deficit with China. For the EU, the deal forms part of a broader Indo-Pacific engagement strategy and reinforces Europe’s role in shaping the global trading system. If negotiations conclude as planned, it would not only unlock economic gains but also create momentum for India and the EU to cooperate more effectively in multilateral platforms, enabling Brussels and New Delhi to promote stability, resilience, and a more balanced, rules-based order.