India and the European Union have successfully concluded negotiations on the proposed free trade agreement, Commerce Secretary Rajesh Agrawal said on Monday.
Terming the agreement as balanced and future-proof from India’s point of view, Agrawal said the agreement would deepen economic integration and boost trade and investment flows between the two economies.
“The negotiations have been concluded successfully. The agreement has been finalized,” he said.
Agrawal added that the legal cleansing of the FTA text is currently underway, with efforts focused on complying with procedural requirements and moving towards signing the agreement at the earliest. The agreement is expected to be signed later this year and could come into force early next year, he added.
Negotiations on the India-EU free trade agreement were first launched in 2007, but have repeatedly stalled over differences over market access, labor standards, intellectual property rights and regulatory issues. Negotiations resumed in 2022 and have gained momentum over the past year amid global trade disruptions and rising protectionist policies.
Officials said political will on both sides was the key differentiator this time. New Delhi and Brussels increasingly see the strategic value of establishing a long-term economic partnership as global supply chains are being reshaped and dependence on China is reassessed.
One of the most important elements of the deal is India’s offer to slash import duties on European cars, according to officials and Reuters. Fully built imported cars are currently subject to customs duties ranging from 70 to 110 percent. Under the proposed framework, customs duties on a limited number of EU-made cars priced above €15,000 could be reduced to 40 percent straight away, with duties gradually reduced by up to 10 percent over time.
India-EU agreement
Commerce Minister Piyush Goyal stressed the importance of sustained engagement to seal the deal. “I am pleased to recognize that sustained and constructive engagement between us and our teams over the past year has brought us closer to a successful outcome,” he said, adding that years of negotiations had resulted in a mutually beneficial agreement. He also said: “The European Union remains a vital economic and strategic partner for India. »
European Commission President Ursula von der Leyen arrived in India for a four-day visit, highlighting the importance of the agreement. She will be joined by European Council President António Costa for summit talks with Prime Minister Narendra Modi on January 27, highlighting the EU’s strategic engagement with India.
European Trade Commissioner Maros Sefcovic described the negotiations as extremely intense. “I am confident that we are nearing the conclusion of our FTA negotiations. The accumulation of an intense past year is probably my most frequent trade engagement, reflecting its importance,” he said, noting that this was his tenth in-person meeting with Goyal.
The European Union is India’s largest trading partner in goods, with bilateral trade estimated at around $136 billion in 2024-25. Once the negotiations are completed, the agreement will undergo legal review and will need to be ratified by the European Parliament and approved by the Union Cabinet of India before being implemented.
Calling it the “mother of all agreements”, Goyal has already highlighted the scale and ambition of the pact. Ajay Srivastava, founder of the Global Trade Research Initiative, said: “The two are not rivals but partners operating at different levels of the value chain,” suggesting the deal is likely to expand trade and reduce costs without posing major risks to Indian industry.
