India and the EU have set a year-end deadline for concluding the long-negotiated bilateral free trade agreement (FTA), which would be the “largest deal of this kind anywhere in the world”.
The decision, taken by Prime Minister Narendra Modi and EU President Ursula von der Leyen in their bilateral meeting on Monday, comes at a time when US President Donald Trump has issued fresh tariff threats to the EU and India, too, has been warned of reciprocal tariffs in April.
The two leaders also agreed to take concrete steps for the realisation of the India-Middle East-Europe Economic Corridor, boost digital tech, including AI, step up security and defence partnership and enhance the dialogue on clean and green energy with a focus on green hydrogen, per a joint statement issued after the meeting.
“We have directed our teams to conclude a mutually beneficial bilateral FTA by the end of this year,” Modi said in his press statement. after the meeting. A blueprint has been prepared for collaboration in the areas of trade, technology, investment, innovation, green growth, security, skilling and mobility, he added.
The two sides will move forward on negotiations for an investment protection pact as well as on geographical indications as part of broader efforts to boost investments, the PM said.
“Timing and determination counts….this partnership comes at the right moment for both of us,” Von der Leyen said, referring to a world fraught with danger but not directly mentioning either the US or Russia.
Von der Leyen said the negotiations for the FTA, the largest one globally, would not be easy, but the EU was committed to making it deliver. The FTA negotiations, which officially first began in 2008 and have seen several ups and downs, are presently stuck over demands for stiff tariff cuts on auto and wines & spirits from the European side and demands for easier work visas and greater market access for labour intensive items such as textiles and leather from the Indian side.
The EU is India’s largest trading partner, accounting for €124 billion worth of trade in goods in 2023 or 12.2 per cent of total Indian trade, ahead of the US (10.8 per cent) and China (10.5 per cent), per EU figures.