EU Anticipates Growth In Trade Talks

EU hopes for further progress in trade talks, tensions persist over several issues. India's priority is removing non-tariff barriers, including safety, packaging, and environmental standards.

Maroš Šefčovič, the EU's Commissioner for Trade and Economic Security, said today that he hoped further progress in trade talks was made during his visit to New Delhi last week, as the December deadline for finalizing a trade deal loomed. “I visited India last week. This was my third visit to India this year in an effort to move the negotiations forward. I am in constant contact with India's Commerce and Industry Minister (Piyush Goyal),” Šefčovič told reporters in Brussels. He also noted that Indian negotiators are known for their tough stance, but assured the EU that the EU would firmly defend its interests. India had decided to expedite negotiations with the European Union, its second-largest export destination, as tensions with the United States (its largest export destination) escalated, and exporters were looking for a larger market to sell their goods in the event of a trade deal with the US not being reached.

EU President Ursula von der Leyen stated that both sides are committed to finalizing a trade agreement by the end of the year. She posted on X, "Now is the time to redouble efforts on partnerships based on shared interests. With our new EU-India strategy, we are taking our relationship to the next level." Differences remain between India and the European Union (EU) on issues related to automobiles, agriculture, alcohol, services, and non-tariff measures, which India considers sensitive and are still under negotiation.

Resolving non-tariff measures related to safety, packaging, and environmental standards is a priority for India. Šefčovič said that both sides had hoped to conclude discussions on agriculture and automobiles, but that did not happen. "We will make another attempt on agriculture."

The EU Trade Commissioner also highlighted the fact that India has one of the highest tariffs on cars in the world, and the discussions are focused on reducing them to benefit both sides. He said, "...but I think we have a better understanding of each other's issues than before, and this will help us prepare for the next round of discussions."

The 13th round of talks for a free trade agreement between India and the European Union was held in New Delhi from September 8 to 12. Further talks are planned to address the shortcomings. Officials are preparing for the 14th round of talks, scheduled in Brussels from October 6 to 10.

An Indian government official told Business Standard, "Good progress has been made on many fronts, but discussions on any new chapter have not yet been completed." Some aspects related to vehicles, alcohol, and services require further discussion. India has also identified non-tariff measures it faces in the European market, primarily in the fisheries and agriculture sectors. Furthermore, the EU's plans to introduce a carbon border adjustment mechanism and deforestation regulation have been key areas of concern for India. The official said, "Even if tariffs are reduced, non-tariff challenges may persist." He added that India's quality control orders are a key area of ​​concern for the EU.

So far, chapters on transparency, streamlined regulations, customs and trade facilitation, intellectual property rights, and administrative support have been completed. Both sides have also reached an agreement in principle on the digital trade chapter.

Negotiations with the EU are being accelerated amid geopolitical uncertainties and protectionist policies being implemented by the United States. An official statement quoting European Commission President Ursula von der Leyen said that Europe is already India's largest trading partner and we are committed to finalising our free trade agreement by the end of the year. Europe is open for business. And we are ready to invest in our shared future with India.

During the financial year 2024-25, India exported goods worth $75.85 billion to the EU, a decline of 0.09 per cent from the previous fiscal year. Commerce Department data showed that imports declined by 1.3 per cent to $60.68 billion in FY2025. The EU was India's second-largest export destination after the US in FY2025.