Facing challenges from China and the United States, India and the European Union have been negotiating a massive free trade pact — and talks, first launched about two decades ago, are nearing the finishing line.
“We are on the cusp of a historic trade agreement,” European Commission President Ursula von der Leyen said this week.
Von der Leyen and European Council president Antonio Costa will attend Republic Day celebrations on Monday before an EU-India summit on Tuesday, where they hope to shake hands on the accord.
Securing a pact, described by India’s Commerce Minister Piyush Goyal as “the mother of all deals”, would be a major win for Brussels and New Delhi as both seek to open up new markets in the face of US tariffs and Chinese export controls.
But officials have been eager to stress there is more to it than commerce.
“The EU and India are moving closer together at the time when the rules-based international order is under unprecedented pressure through wars, coercion and economic fragmentation,” the EU’s top diplomat, Kaja Kallas, said on Wednesday.
‘Untapped potential’
Russia’s invasion of Ukraine and US President Donald Trump’s punitive tariffs have brought momentum to the relationship between India and the EU, said Praveen Donthi, of the International Crisis Group think tank.
“The EU eyes the Indian market and aims to steer a rising power like India away from Russia, while India seeks to diversify its partnerships, doubling down on its strategy of multi-alignment at a time when its relations with the US have taken a downward turn,” he said.
The summit will offer Brussels the chance to turn the page after a bruising transatlantic crisis over Greenland — now seemingly defused.
Together, the EU and India account for about a quarter of the world’s population and GDP.
Bilateral trade in goods reached €120 billion ($139bn) in 2024, an increase of nearly 90 per cent over the past decade, according to EU figures, with a further €60bn ($69bn ) in trade in services.
But both parties are eager to do more.
“India still accounts for around only around 2.5 per cent of total EU trade in goods, compared with close to 15 per cent for China,” an EU official said, adding the figure gave a sense of the “untapped potential” an agreement could unlock.
EU makers of cars, machinery and chemicals have much to gain from India lowering entry barriers, said Ignacio Garcia Bercero, an analyst at Brussels think tank Bruegel, who led EU trade talks with New Delhi over a decade ago.
Source: dawn