India-EU FTA by this year end : PM Modi
NEW DELHI : Prime Minister Shri Narendra Modi on Friday announced that the India-EU Free Trade Agreement will be reached by the end of 2025.
“We have had sincere and meaningful discussions, yesterday on various issues. We have asked our teams to work on a mutually benefit Free Trade Agreement and to realise it by the end of this year,” PM Modi said in a joint statement with European Union Chief Ursula von der Leyen.
Ursula von der Leyen is on a two-day visit to India and is accompanied by top leaders of the EU member nations. Earlier today, the European Commission President said the EU and India have agreed to push to get a long-pending free trade agreement done this year and that the two sides will strengthen their partnership in the areas of trade, technology, connectivity and defence.
“I am well aware it will not be easy. But I also know that timing and determination counts,” von der Leyen said in Delhi, adding that such an agreement would be the largest deal of this kind anywhere in the world. The EU Commission Chief in India was accompanied by the entire College of Commissioners – the first such visit after the European parliamentary elections in June 2024
She added the two sides wanted to deepen trade and investment collaboration in wide ranging areas like semiconductors, AI and cleantech. India and EU relaunched talks on a long pending free trade agreement in 2021 and are set to hold another round in March. An India-EU Summit is also being held later in the year.
Von der Leyen also said that India and EU were pushing for renewed cooperation in security and stability and were exploring a future ‘Security and Defence Partnership‘ with India similar to the partnerships with Japan and South Korea.
The EU is India’s largest trading partner, ahead of the US and China. In the 2023-24 fiscal year, exports and imports to the European bloc accounted for more than $130 billion, marking an increase of about 90 per cent over the past decade. Over 6,000 European companies are also present in India.
PM Modi added that the two sides have discussed cooperating in the field of technology that will cover areas like semiconductors, AI, high-performance computing, and 6G. “We have also decided to start a space dialogue. The balance of ecology and economy has been our shared commitment, and in this direction, we have a strong cooperation. We have decided to have a Green Hydrogen Forum and Offshore Wind Energy Business Summit,” he said.
India and the EU relaunched talks on a long-pending free trade agreement in 2021, but issues like market access for products such as cars and alcoholic beverages have been sticking points. The next round of negotiations is set to take place in March.
Brussels is ramping up efforts to finalise the free trade agreement with New Delhi in the face of potential US tariffs. US President Donald Trump has said he is planning to hit goods made in the EU with tariffs of 25 per cent.
The EU chief confirmed the plans to reach the FTA by the end of this year, saying, “We have to agree to work on a new strategic agenda, and I see three main avenues. First, we will work together on economic growth. The potential is immense. Europe is already India’s biggest trading partner. Now, we have tasked our teams to build on this momentum and finalize our Free Trade Agreement before the end of the year. We’re expecting a lot of our trade negotiations.”