"Free trade pact, within the year" - EU-India agree to accelerate talks to reach agreement
Indian Prime Minister Narendra Modi and the European Union have agreed to push for the conclusion of a free trade pact this year, European Commission President Ursula von der Leyen said.
Von der Leyen's visit, accompanied by EU leaders, comes at a time of rising geopolitical tension, with Brussels and New Delhi determined to outline key areas for closer cooperation.
"We are looking to diversify some of our most critical value chains," von der Leyen said. She called for an "ambitious" trade and investment agreement that could cover many industries, from batteries and pharmaceuticals to semiconductors, clean hydrogen and defense.
Talks on an India-EU free trade agreement resumed in 2021, after being stalled for eight years, and now cover issues from investment protection to geographical indications.
The EU is India's largest trading partner in goods, with two-way trade having grown by around 90% over a decade to reach $137.5 billion in the fiscal year 2023/24.
Speaking at an event in New Delhi, von der Leyen said that turbulent times offer great opportunities for partnership between India and the EU. The two leaders agreed to conclude a free trade pact this year, she added.
"I believe that this modern version of great power competition is also an opportunity for Europe and India to reimagine their partnership," von der Leyen said.
The deal had been delayed for many years by New Delhi's reluctance to reduce tariffs in some areas, while the European Union showed reluctance to ease visa restrictions for Indian professionals.
The EU wants India to cut tariffs of more than 100% on imported cars, whisky and wine, while India seeks greater access for its cheaper drugs and chemicals to the bloc's market.
India also wants lower tariffs on exports of textiles, clothing and leather products. The country also opposes an EU proposal to raise tariffs from 20% to 35% from January 2026 on high-carbon goods, including steel, aluminum and cement.
US President Donald Trump, who has called India one of the countries that imposes the highest tariffs, has threatened a reciprocal tariff by April, although India hopes to reach a deal with Washington.
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