India is aiming to finalize a free trade agreement (FTA) with the European Union by the end of 2025. This was stated by Prime Minister Narendra Modi during his visit to Cyprus. Cyprus, which is slated to assume the EU presidency in 2026, has pledged its support and has offered itself as a key entry point to Europe and a transhipment hub, signaling a strong commitment to bolstering EU-India relations. External Affairs Minister S Jaishankar has also expressed confidence that the year-end timeline for the FTA is feasible, following discussions with EU officials.
Negotiations for the comprehensive trade agreement, investment protection agreement, and geographical indications pact between India and the 27-nation EU bloc were resumed in June 2022, after being stalled for over eight years due to disagreements over market access. Eleven rounds of negotiations have occurred thus far. The next round of talks is scheduled to begin on July 7 in Brussels.
According to L Satya Srinivas, Additional Secretary in the Department of Commerce, the frequency of meetings has increased, with negotiating rounds now held more often than the previous quarterly schedule. Out of the 23 chapters in the FTA, five have already been completed, with efforts underway to find common ground on a significant number of issues to facilitate the agreement's closure.
India's key objectives in the negotiations include securing zero tariffs on labor-intensive exports and enhanced access to the EU's services market. Meanwhile, the EU is advocating for India to reduce tariffs on automobiles and wine. There are reports that India is resisting concessions on dairy products.
PM Modi highlighted India's economic growth, driven by next-generation reforms, policy predictability, a stable political environment, and ease of doing business, which has positioned India as the world's fastest-growing major economy. He also noted the unlimited possibilities for expanding economic ties with Cyprus.
The FTA is expected to significantly boost trade and economic cooperation between India and the EU. Both PM Modi and Cypriot President Nikos Christodoulides voiced optimism about the agreement's conclusion by the end of the year. At a roundtable in Limassol, the two leaders engaged with business leaders from both nations, with PM Modi expressing confidence that the interaction would enhance commercial linkages between the two countries. He welcomed the launch of the India–Greece–Cyprus (IGC) Business and Investment Council, which will promote trilateral cooperation in shipping, logistics, renewable energy, civil aviation, and digital services.
India is also pursuing a trade link via sea and rail, known as the India-Middle East-Europe Corridor. Cyprus is offering its facilities to be a point of entry to Europe.
