After nearly two decades of stalled negotiations, India and the European Union are closer than ever to finalising a long-pending Free Trade Agreement. First launched in 2007 and suspended in 2013 over sharp differences on tariffs, market access and regulations, the talks have gained fresh momentum in a changed global economic landscape.
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The real breakthrough came after 2020, when the pandemic disrupted supply chains, geopolitical tensions rose and protectionism surged worldwide. In 2022, India and the EU formally relaunched negotiations, expanding them to include an investment protection pact and a geographical indications agreement. Now, with talks in their final stages, both sides are eager to seal the deal.
For India, the EU offers a vast and stable market of over 450 million consumers. An FTA would lower tariffs that currently disadvantage Indian goods like textiles, garments and pharmaceuticals, boosting competitiveness against rivals such as Bangladesh and Vietnam. Labour-intensive sectors, manufacturing and services like IT and telecom are expected to gain significantly.
For Europe, India represents a fast-growing market for high-value goods and services. Beyond economics, the FTA is a strategic move to anchor India more deeply into global supply chains. If signed, it could mark a defining shift in India’s trade diplomacy.
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