As India gears up to host top European leaders during the Republic Day celebrations on January 26, European Commission President Ursula von der Leyen expresses optimism about the India-Europe free trade agreement. Von der Leyen highlights Europe’s efforts to expand markets amidst US tariff uncertainties and shifting geo-economic dynamics. She emphasizes the potential of the trade agreement, labeling it as a significant deal that could unite a market of 2 billion people, representing a substantial portion of the global GDP.
The upcoming India-EU summit, scheduled for January 27, is expected to mark the finalization of the landmark Free Trade Agreement negotiations. Following the Republic Day festivities, the formal announcement of the agreement is anticipated, with both sides adopting a document to signal the conclusion of negotiations. The agreement will then undergo the necessary legal procedures and ratification by the European Parliament and Council.
In addition to the trade deal, India and the European Union are poised to sign agreements on security and defense partnerships, as well as enhancing mobility for Indian professionals seeking opportunities in the EU. The trade pact, described by Commerce Minister Piyush Goyal as the “mother of all deals,” is set to cover goods and services between India and the 27-nation European Union, a crucial export market for India.
With a collective market size of nearly two billion individuals, the agreement will connect two major democratic economies against the backdrop of global economic uncertainties triggered by US trade disruptions and geopolitical tensions worldwide. The European Union stands as India’s largest trading partner, with bilateral trade in goods amounting to $135 billion in the FY24. The FTA is expected to provide additional market access and economic synergies, although discussions continue on sensitive issues like the EU’s Carbon Border Adjustment Mechanism (CBAM).
India is advocating for duty-free access to its labor-intensive sectors, including textiles, leather, apparel, gems and jewelry, and handicrafts. Commerce Minister Goyal recently announced that the trade agreement negotiations with the European Union are in their final stages, signaling progress towards a comprehensive deal.
