India-EU FTA talks begin in Delhi; focus likely on market access, non-tariff barriers

India and the European Union are set to hold the 13th round of talks for a Free Trade Agreement in New Delhi beginning Monday, marking a critical step towards finalising the trade pact by the end of this year.

With both sides aiming to deepen economic ties and counter global trade uncertainties, this round is expected to address issues related to non-tariff barriers, and market access to pave the way for a comprehensive agreement, an official said.

The negotiations, which will run through the week, follow a series of high-level engagements, including the February visit of European Commission President Ursula von der Leyen to India, where she and Prime Minister Narendra Modi reaffirmed their commitment to concluding the FTA by the year-end. The talks also come in the backdrop of US tariffs of India and White House’s call to EU to impose additional duties on India as punitive measure over Russian oil purchases. The European Union stands as one of India’s primary export destinations, accounting for over 15 per cent of India’s total outbound shipments. In 2024-25, India exported goods worth $75.76 billion to the EU, resulting in a trade surplus of $15.10 billion.

European Commissioner for Trade and Economic Security Maros Sefcovic and Agriculture Commissioner Christophe Hansen are also expected to visit India this week to hold discussions with Indian counterparts, the official said. These talks aim to resolve key sticking points, including tariffs on automobiles, agriculture and dairy, as well as market access for Indian pharmaceuticals, textiles and services. The outcome of this round is seen as pivotal, with both sides weighing the possibility of a political decision to break the deadlock on contentious issues.

The negotiations, relaunched in 2023 after a nearly decade-long hiatus, cover 23 policy areas, including trade in goods and services, investment, intellectual property rights, and sustainable development. Progress has been made, with various chapters covering intellectual property, customs and trade facilitation already finalised during the 11th round in May. The current round will focus on market access for goods, rules of origin, and services, building on agreements in principle reached on the Digital Trade chapter and Anti-Fraud clause in July. 

Despite the momentum, challenges remain. India’s high tariffs, averaging 39% on agricultural imports, and the EU’s stringent regulations, including the proposed Carbon Border Adjustment Mechanism, continue to pose hurdles. The EU seeks reduced tariffs on cars, wine and dairy, while India pushes for greater access for its pharmaceuticals, textiles, and skilled professionals. Experts suggest that flexibility, such as phased liberalisation or excluding sensitive sectors like agriculture, could help bridge these gaps, drawing lessons from the EU-Mercosur FTA.

India’s primary exports to the European Union encompass a diverse array of products, with a significant focus on machinery and appliances, transport equipment, chemicals, and textiles. India also plays a substantial role in exporting diesel to Europe, and trade in gems, jewellery, and pharmaceuticals is substantial.

Commerce Minister Goyal, speaking at the 20th Global Sustainability Summit, emphasised the advanced stage of the talks, noting “significant progress” and ongoing engagement with EU counterparts.

The India-EU FTA, if concluded, is poised to be one of the largest trade deals globally, enhancing economic cooperation and reinforcing both parties’ positions in a multipolar world.