India and the European Union are aiming to finalize a free trade agreement (FTA) by the end of 2025, with Commerce and Industry Minister Piyush Goyal expressing optimism about the prospects. Negotiations between India and the EU resumed in June 2022 after an eight-year hiatus. The 14th round of negotiations began on October 6, 2025, in Brussels, with senior officials from both sides working to iron out differences and expedite the process. These talks are scheduled to last five days.
The envisioned FTA aims to boost commerce and investments between India and the EU, encompassing 23 policy areas with significant duty cuts and tax reductions. These areas include trade in goods and services, investment protection, intellectual property rights, sustainable development, and government procurement.
India's bilateral trade in goods with the EU was valued at $136.53 billion in FY25, with exports accounting for $75.85 billion and imports at $60.68 billion. This makes the EU India's largest trading partner for goods. 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. In 2023, bilateral trade in services between India and the EU was estimated at $51.45 billion.
If the agreement sails through, Indian goods exports to the EU, such as ready-made garments, pharmaceuticals, steel, petroleum products, and electrical machinery, could become more competitive. The EU is seeking tariff reductions on automobiles, medical devices, wines, and spirits, alongside stronger intellectual property protection. India, conversely, is focused on greater market access for textiles, pharmaceuticals, steel, petroleum products, and electrical machinery.
Several sticking points remain. These include access to agriculture, dairy products, wines, and automobiles. The EU's Carbon Border Adjustment Mechanism (CBAM), set to tax carbon-intensive imports starting in January 2026, also poses a challenge. India views CBAM as a unilateral and regressive measure and seeks exemption under the FTA or its reframing as part of a broader climate cooperation strategy.
Commerce Secretary Rajesh Agrawal is scheduled to visit Brussels to meet with European Commission Director General for Trade Sabine Weyand, aiming to give impetus to the ongoing negotiations. Goyal is also expected to meet EU Trade Commissioner Maros Sefcovic in South Africa later in October to review the progress of talks.
EU Ambassador Hervé Delphin has emphasized that the FTA should be used to increase bilateral trade and investment amid global tariff uncertainties. Both EU President Ursula Von Der Leyen and Prime Minister Narendra Modi have set the goal to conclude the FTA by the end of this year.
In addition to the EU, India is also engaged in trade negotiations with the United States, Oman, Chile, and Peru. Goyal has stated that India is strengthening its global trade network through FTAs with major partners.
