India and the EU have closed 20 of 24 chapters of their proposed free trade agreement, aiming to finalise it before EU leaders visit India this month.
The deal gains urgency amid uncertainty over a US trade pact and fears of heavy American tariffs hurting Indian exports.
Sensitive agricultural issues have been kept out, while carbon tax norms and market access for automobiles remain key hurdles.
India has made significant headway in its long-running free trade negotiations with the European Union, even as uncertainty over a potential pact with the United States continues to weigh on investment and export prospects.
Commerce Secretary Rajesh Agarwal said Thursday that 20 of the 24 chapters of the India-EU agreement have been concluded, and both sides are working intensively to close the remaining gaps before European leaders arrive in New Delhi later this month. The President of the European Council, Antonio Luis Santos da Costa, and European Commission President Ursula von der Leyen will be chief guests at the Republic Day celebrations and will co-chair the 16th India-EU Summit on January 27.
“We are in the last and most arduous leg of negotiations. We are virtually engaged on a day-to-day basis and trying to meet the timeline before our leaders meet,” Agarwal told reporters.
The push comes against the backdrop of volatile US trade policies that have unsettled Indian exporters, particularly in labour-intensive sectors such as apparel. Officials believe a comprehensive deal with the EU could offset some of the impact of steep American tariffs and open a large, stable market for Indian goods and services.
Government sources said agriculture—one of the most contentious areas—has been kept outside the scope of the agreement. Reports from Brussels suggest the EU is also willing to exclude farm products, a move aimed at avoiding political backlash similar to the protests seen over the EU-Mercosur pact.
However, several thorny issues remain unresolved. India has expressed concerns over the EU’s Carbon Border Adjustment Mechanism (CBAM), which could impose additional duties on Indian exports of steel, aluminium and other energy-intensive products. Market access for European automobiles and spirits, particularly whisky, has also been a sticking point.
Despite these challenges, both sides appear keen to seal the agreement. India has already concluded three trade deals in 2025, while the EU recently finalised a long-pending pact with the Mercosur bloc. Exporters say an India-EU FTA would be among the largest ever signed by New Delhi and could help divert orders currently shifting to competitors such as Bangladesh and Vietnam.
With negotiations entering the final stretch, officials in New Delhi hope the summit later this month will deliver a landmark economic partnership at a time when global trade is increasingly uncertain.
