India-EU FTA talks concluded, pact may come into force next year: Commerce Secretary

India and the European Union have successfully concluded negotiations on the proposed free trade agreement, Commerce Secretary Rajesh Agrawal said on Monday.

Describing the pact as balanced and forward-looking from India’s perspective, Agrawal said the agreement would deepen economic integration and boost trade and investment flows across both economies.

“Negotiations have been successfully concluded. The deal has been finalised,” he said.

Agrawal added that legal scrubbing of the FTA text is currently underway, with efforts focused on completing procedural requirements and moving toward signing the agreement at the earliest. The pact is expected to be signed later this year and could come into force early next year, he said.

Negotiations on the India–EU free trade agreement were first launched in 2007 but stalled multiple times over differences on market access, labour standards, intellectual property rights and regulatory issues. Talks were revived in 2022 and gained momentum over the past year amid global trade disruptions and a rise in protectionist policies.

Officials said political will on both sides has been the key differentiator this time. New Delhi and Brussels increasingly see strategic value in securing a long-term economic partnership as global supply chains are being reshaped and reliance on China is reassessed.

One of the most significant elements of the agreement is India’s offer to substantially reduce import duties on European cars, according to officials and Reuters. Fully built imported cars currently attract tariffs ranging from 70 per cent to 110 per cent. Under the proposed framework, peak duties on a limited number of EU-made cars priced above €15,000 could be cut to 40 per cent upfront, with tariffs gradually reduced further toward 10 per cent over time.

India-EU deal

Commerce Minister Piyush Goyal underlined the importance of sustained engagement in closing the deal. “Pleased to agree that sustained & constructive engagement between us & our teams over the past year has brought us closer to a fruitful outcome,” he said, adding that years of negotiations had culminated in a mutually beneficial agreement. He also said, “The European Union remains a vital economic & strategic partner for India.”

European Commission President Ursula von der Leyen has arrived in India for a four-day visit, underscoring the significance of the agreement. She will be joined by European Council President António Costa for summit-level talks with Prime Minister Narendra Modi on January 27, highlighting the EU’s strategic engagement with India.

EU Trade Commissioner Maros Sefcovic described the negotiations as exceptionally intensive. “I’m confident to say we’re nearing the conclusion of our FTA negotiations. The cumulation of an intense past year likely my most frequent trade engagement reflecting its importance,” he said, noting that this marked his tenth in-person meeting with Goyal.

The European Union is India’s largest trading partner in goods, with bilateral trade estimated at around $136 billion in 2024-25. Following the conclusion of negotiations, the agreement will undergo legal review and will require ratification by the European Parliament and approval from India’s Union Cabinet before implementation.

Calling it the “mother of all deals,” Goyal has previously highlighted the scale and ambition of the pact. Ajay Srivastava, founder of the Global Trade Research Initiative, said, “The two are not rivals but partners operating on different rungs of the value chain,” suggesting the agreement is likely to expand trade and lower costs without posing major risks to Indian industry.