India and EU Launch Pivotal 11th Round of FTA Talks in New Delhi

In a significant step towards reshaping global economic partnerships, India and the European Union have launched the 11th round of negotiations for their much-anticipated Free Trade Agreement (FTA) in New Delhi today. The talks, scheduled to continue until May 16, mark a renewed momentum in a deal that promises to deepen economic ties between the world’s fifth-largest economy and the 27-member European bloc.

The discussions, aim to finalize the first phase of the agreement, setting the groundwork for comprehensive trade liberalization across sectors. This round is particularly crucial as both parties have agreed to adopt a phased approach, an increasingly common strategy for India, which has followed similar two-step negotiation frameworks with countries like Australia and the United States.

The decision to split the agreement into two phases stems from the evolving and uncertain global trade environment, particularly in the aftermath of protectionist moves such as tariff actions by the U.S. during the Trump administration.

The phase-wise approach allows negotiators to fast-track areas of convergence, particularly in goods, services, investment, and government procurement, while deferring more complex or politically sensitive issues to a later stage. “If some of the issues which may not be very core to the trade take more time, then it is better to focus on core trade issues,” said Commerce Secretary Sunil Barthwal, who recently reviewed the negotiations with senior officials. “We are also discussing with the EU what can be the early harvest of the first tranche, where we can do faster,” he added. A successful agreement would unlock substantial opportunities for both sides. For India, the deal could significantly enhance the competitiveness of its exports such as pharmaceuticals, textiles, steel, electrical machinery, and petroleum products in the EU market. The EU, on the other hand, is seeking broader access to India's vast consumer market by demanding tariff reductions on automobiles, wines and spirits, medical devices, poultry, and meat, along with assurances on a strong intellectual property regime.

The EU currently accounts for approximately 17% of India’s total exports, while exports from the EU to India make up around 9% of its overall exports. Bilateral trade in goods between the two sides reached a robust $137.41 billion in FY 2023–24, with Indian exports standing at $75.92 billion and imports from the EU at $61.48 billion. Moreover, trade in services touched $51.45 billion in 2023, underscoring the strategic importance of the services sector, including information technology, finance, and professional services.

The momentum for this latest round of negotiations has been steadily building. On May 1, India’s Commerce and Industry Minister Piyush Goyal visited Brussels to hold high-level discussions with his EU counterparts and review the progress made. His visit set the stage for the 11th round by reaffirming India's commitment to a swift and mutually beneficial resolution.

Meanwhile, political leaders on both sides have reiterated their determination to bring the FTA to fruition. On February 28, Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen jointly committed to concluding the comprehensive agreement by the end of 2025, highlighting its strategic and economic significance.

“The India-EU Free Trade Agreement is not just a trade pact; it is a symbol of the evolving partnership between two global actors committed to democratic values, sustainable growth, and economic resilience,” Prime Minister Modi said during his interaction with EU officials earlier this year.

The current FTA under discussion is part of a wider set of three negotiations: a Free Trade Agreement, an Investment Protection Agreement, and a Geographical Indications (GI) Agreement. These collectively cover 23 policy areas including Trade in Services, Technical Barriers to Trade, Sanitary and Phytosanitary Measures, Rules of Origin, Dispute Settlement, and Sustainable Development. If successfully concluded, the FTA will not only eliminate a significant portion of customs duties but also harmonize standards and facilitate smoother movement of goods and services. It is expected to reduce the cost of doing business, enhance regulatory cooperation, and promote digital trade and clean energy collaboration. It will also support the EU’s ambition to establish stronger economic links with the Indo-Pacific region, a strategy explicitly emphasized in the EU’s 2021 Indo-Pacific strategy.

While challenges remain especially in aligning standards, resolving data protection concerns, and managing agricultural sensitivities, the resumption of talks and the political will showcased by both sides suggest a turning point in India-EU trade relations.