India and the European Union (EU) will kick off the 11th round of negotiations on their long-pending free trade agreement (FTA) starting May 12, 2025, in India. The talks, scheduled to continue until May 16, aim to conclude the pact in two phases, addressing core trade issues first due to the uncertain global trade environment, notably influenced by U.S. tariff policies.

This phased approach reflects India’s recent strategy seen in trade talks with Australia and the United States, focusing on an “early harvest” of easily agreeable topics before tackling more complex issues later.

Negotiation Focus and Timelines

The Indian and EU teams plan to include issues where there is clear convergence in the first phase, aiming to conclude this segment swiftly. The second phase is targeted for completion by the end of 2025.

The previous round of talks primarily covered market access offers in key areas such as goods, services, investment, and government procurement.

Commerce Secretary Sunil Barthwal emphasised the approach last month:

“If some issues are not core to trade and require more time, it is better to focus on the core trade issues first. We are discussing with the EU on what can be the early harvest in the first tranche where we can do faster.”

He chaired a review meeting on the negotiations on May 10 with senior officials.

EU Demands and Indian Export Opportunities

The EU seeks significant duty reductions on automobiles and medical devices, as well as tariff cuts on products such as wines, spirits, meat, and poultry. It also demands a strong intellectual property regime.

On the other hand, India stands to benefit as key export sectors like ready-made garments, pharmaceuticals, steel, petroleum products, and electrical machinery could become more competitive in the EU market once the pact is finalised.

Commerce and Industry Minister Piyush Goyal recently visited Brussels on May 1 to discuss progress with EU counterparts.

Background and Trade Significance

Negotiations for the India-EU FTA were resumed in June 2022 after an eight-year hiatus caused by disagreements on market access levels. The negotiations cover 23 policy areas, including:

• Trade in Goods

• Trade in Services

• Investment

• Sanitary and Phytosanitary Measures

• Technical Barriers to Trade

• Trade Remedies

• Rules of Origin

• Customs and Trade Facilitation

• Competition

• Trade Defence

• Government Procurement

• Dispute Settlement

• Intellectual Property Rights

• Geographical Indications

• Sustainable Development

In the fiscal year 2023-24, bilateral trade in goods between India and the EU reached $137.41 billion, with India exporting $75.92 billion and importing $61.48 billion. The EU is India’s largest trading partner for goods.

India’s exports to the EU make up about 17% of India’s total exports, while India accounts for 9% of the EU’s total exports. Trade in services between the two was valued at $51.45 billion in 2023.

Additional Agreements in Progress

Apart from the FTA, India and the EU are negotiating:

• An investment protection agreement

• An agreement on geographical indications (GIs)

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