India and the European Union (EU) are pushing to accelerate talks for a free trade agreement (FTA), as highlighted during Commerce and Industry Minister Piyush Goyal’s recent visit to Brussels. Goyal held high-level discussions with EU Trade and Economic Security Commissioner Maros Sefcovic, aiming to secure a mutually beneficial agreement.
The renewed efforts reflect a strong political will from both sides to deepen economic integration. Negotiations had been relaunched in June 2022 after a nine-year hiatus. Since then, 16 rounds of negotiations and several high-level dialogues have taken place.
During the Brussels talks on January 9, 2026, key areas of the proposed agreement were addressed. Goyal reaffirmed India's commitment to a rules-based trade framework and a modern economic partnership. This partnership aims to protect the interests of farmers and Micro, Small, and Medium Enterprises (MSMEs), while also integrating Indian industries into global supply chains. India is particularly focused on gaining duty-free access for its labor-intensive sectors, including textiles, leather, clothing, gems and jewelry, and handicrafts. The EU, on the other hand, seeks significant tariff reductions in sectors like automobiles, medical devices, wine and spirits, and stronger intellectual property protections.
The discussions in Brussels followed intensive deliberations between Indian Commerce Secretary Rajesh Agrawal and the European Commission's Director-General for Trade, Sabine Weyand. These engagements underscore the intensification of diplomatic and technical efforts to provide strategic guidance to negotiating teams, resolve outstanding issues, and accelerate the conclusion of a balanced agreement.
A significant challenge in the negotiations is the EU's Carbon Border Adjustment Mechanism (CBAM), which will impose a carbon price on imports of certain industrial goods into the EU. This has become a contentious issue, overshadowing tariff reductions and market access gains. India has expressed concerns about the CBAM's impact, particularly on SMEs, and both sides have agreed to continue addressing these challenges.
The EU is currently India's largest trading partner. In the financial year 2024-25, bilateral trade in goods between India and the EU stood at USD 136.53 billion, with exports from India valued at USD 75.85 billion and imports at USD 60.68 billion. The EU market accounts for approximately 17% of India's total exports, while the bloc's exports to India constitute 9% of its total overseas shipments.
Both India and the EU are aiming to finalize a fair, balanced and comprehensive trade agreement. The India-EU Summit is expected to be held on January 27, with senior EU leaders anticipated to attend India's Republic Day celebrations on January 26 as chief guests.
