India and the European Union are intensifying negotiations for a free trade agreement (FTA), aiming to finalize the deal by the end of the year. A delegation of European officials is in New Delhi this week for the 13th round of talks, focusing on resolving trade barriers and expanding strategic and defense ties amid global uncertainties. The next round is scheduled to take place in Brussels early next month.

The renewed push for the FTA comes against the backdrop of increasing global trade tensions, including tariffs imposed by the United States on India and calls for the EU to levy additional duties on Indian goods. New Delhi seeks new markets to mitigate the impact of these tariffs.

The EU is India's largest trade partner, with bilateral goods trade reaching $135 billion in 2023-24. Trade in services between the EU and India reached €59.7 billion in 2023, a significant increase from €30.4 billion in 2020. While non-tariff barriers remain a hurdle, negotiators are optimistic about bridging gaps to strike the “right equilibrium”.

The negotiations involve complex issues such as rules of origin, market access, and duties on agricultural products, particularly wine and dairy. India has remained firm on sensitive sectors, excluding rice, sugar, and dairy from negotiations, while the EU is seeking improved access for automobiles and spirits.

European Commission trade chief Maros Sefcovic and agriculture commissioner Christophe Hansen are in New Delhi for high-level talks with Indian counterparts. They will meet with Commerce Minister Piyush Goyal and Agriculture Minister Shivraj Singh Chouhan. These high-level visits are intended to inject political energy and help advance negotiations.

So far, 11 out of 23 policy chapters have been concluded, including customs, digital trade, competition, intellectual property rights, and dispute settlement. Agreement on capital movement is also nearing completion. The substantial progress in the digital trade chapter is significant, as India's booming service sector could benefit significantly from integration with the EU. Upcoming rounds will tackle complex issues such as technical trade barriers, sanitary standards, public procurement, and digital trade logistics.

Beyond the trade pact, India and the EU are also working on a broader strategic agenda, including a new politico-strategic vision and frameworks to strengthen defense ties. The EU is expected to unveil its new strategic vision for ties with India on September 17, with formal adoption likely at the annual summit scheduled to be held in India early next year. This vision is expected to reinforce strategic partnership in areas like technology, trade, mobility, defense, and security.

The EU's vision document will be a precursor to the joint strategic agenda that will be formalized at the next India-EU summit early next year. Ahead of the summit, a series of high-level engagements have been planned to boost cooperation in areas ranging from trade to counterterrorism and the Indo-Pacific. The FTA is also expected to be formally signed at the summit.

The Trade and Technology Council (TTC), established in 2022, serves as an important forum for deepening cooperation in strategic technologies like reliable AI and semiconductors. A meeting of the TTC is also scheduled for this fall to focus on possible deliverables for the summit.

Prime Minister Narendra Modi and EU leaders have urged an accelerated conclusion to the FTA. The deal also aligns with preparations for the 2026 India–EU Summit and is closely linked to the upcoming presentation of a new strategic agenda by the EU on September 17.