India, EU likely to conclude much awaited FTA talks on January 27

'Sensitive' agri issues may be off the table

India and the European Union (EU) are likely to announce the conclusion of talks for the much awaited free-trade agreement (FTA) on January 27 during the visit of the bloc’s leadership. 

“We are expected to conclude the negotiations and have the deal ready. Signing, I think, is unlikely, but definitely we can have the deal ready. There can be some kind of announcement at that point, but that will depend upon how the progress is in the next five days,” commerce secretary Rajesh Agrawal told reporters on Thursday. 

During the three-day (January 25-27) state visit, President of the European Council, António Luís Santos da Costa and the President of the European Commission Ursula von der Leyen will co-chair the 16th India-EU Summit in New Delhi along with Prime Minister Narendra Modi and also be the chief guests at this year’s Republic Day Parade. 

 

Both sides have, so far, concluded 20 out of 24 chapters of the deal. “There are a few issues, in which negotiations are on. We are virtually engaged on a day-to-day basis. We are trying to see if we can meet the timeline — before the leaders’ meeting,” Agrawal said. 

The agreement will cover all aspects of the deal but only ‘sensitive’ agriculture issues on ‘both sides’ are off the table, a senior government official said, referring to a European publication report stating that the deal will exclude agriculture.

 

Brussels-based European news website Euractiv reported that Von der Leyen told members of the European Parliament that the trade deal with India excludes agriculture. Speaking at a meeting with her centre-right European People’s Party (EPP) group on Wednesday, von der Leyen called the deal a “massive signal” for EU trade relations, despite the carve-out, adding that it had been “clear from the very beginning” that agriculture would not be included in the final package.

 

Sabine Weyand, the EU’s top trade official, told EU ambassadors on Wednesday morning that the package agreed on agricultural tariffs privileges defensive interests on both sides, according to an EU official. She said that Brussels has reached an agreement with New Delhi on reducing 150 per cent tariffs on European wine and spirits, the official added.

 

India and the EU have been holding back-to-back rounds of negotiations to narrow the differences between both sides, ahead of an ambitious timeline to conclude the deal. Some of the thorny issues include India’s concerns over the bloc’s policies on steel- import quotas, and carbon border adjustment mechanism (CBAM) that kicked in from January 1. Lower tariffs on automobiles, wine, and agricultural products remain the bloc’s key areas of interest.

 

During 8-9 January, Commerce and Industry Minister Piyush Goyal visited Brussels, in a decisive step forward in the India-EU FTA negotiations and in resolving pending issues. It was preceded by high-level discussions between Agrawal and the Director-General for Trade, European Commission on 6-7 January.

 

The meetings focused on stocktaking the progress achieved across various negotiating tracks to ‘narrow divergences’ and ensuring clarity on outstanding issues, the department of commerce said.

 

The EU is India’s largest trading partner, and India’s bilateral trade in goods with the EU was $ 136.53 billion in 2024-25 with exports worth $ 75.85 billion and imports of $60.68 billion.

 

For New Delhi, the trade deal with the 27-nation European bloc is crucial amid India-US trade negotiations having dragged on, and India exploring new export markets as the White House has imposed a 50 per cent additional tariff on its exports. Apart from the economic benefits of the trade agreement, the EU, especially its biggest members, such as Germany and France, are keen to wean India off Russian influence. Both New Delhi and the European bloc are hopeful that their deal will help cut their mutual dependence on China.

 

Also on agenda

 

In statements issued Thursday afternoon simultaneously from New Delhi and Brussels, the headquarters of the European Commission, the two sides announced the much-anticipated visit. It will be a first for the EU leadership to be the chief guests at the Republic Day parade, the European Commission said. In New Delhi, the two will hold restricted and delegation-level talks with Prime Minister Modi. An India-EU Business Forum is also expected to be organised on the sidelines of the India-EU Summit, the Ministry of External Affairs (MEA) said.

 

Apart from the trade pact, the two sides are also likely to unveil a defence-framework agreement and a strategic agenda, which identifies five areas of shared interest that include security and defence, connectivity and global issues, prosperity, sustainability, technology and innovation.

 

“India is a crucial partner for the EU. Together, we share the capacity and responsibility to protect the rules-based international order. This meeting will be a key opportunity to build on our partnership and drive progress in our cooperation,” the European Council announcement quoted Costa, the Council’s President, as having said.

 

It said that Prime Minister Modi and the visiting EU leadership will aim to build on the EU-India strategic partnership and further strengthen collaboration across key policy areas. “Trade, security and defence, the clean transition and people-to-people cooperation will top the agenda of the discussions,” the European Council said.