EU Commission accelerates trade negotiations with India

Brussels – Closing negotiations with India on a free trade agreement by 2025. In times of tariffs and trade tensions with its historic ally the United States, the European Union points its compass towards other capitals and, as European Commission President Ursula von der Leyen told the plenary session on Wednesday, intends to “finalise negotiations for a historic agreement with India by the end of this year.” And today, to make progress towards that goal, the European Commissioners for Trade, Maros Sefcovic, and Agriculture, Christophe Hansen, flew to New Delhi. 

“The aim is to fill in the remaining gaps in order to reach a comprehensive and economically meaningful package for both sides,” announced European Commission Trade Spokesperson Olof Gill in the daily press briefing, pointing out that the two Commissioners met with their Indian counterparts “to take this process forward, including at the political level.” 

Speaking at the 65th annual session of the Association of Automotive Component Manufacturers of India in New Delhi today, Sefcovic pointed out that the global context is that of “a difficult world,” where “geopolitics and global trade are in crisis.” 

Therefore, “we are working on an agreement to unlock investment, reduce barriers, expand market access, and improve supply chains, to the benefit of both sides,” the EU and India. Sefcovic recalled the extent of the trade relationship between Brussels and New Delhi: “In 2024, the EU was India’s largest trading partner, ahead of the US and China. Over 6,000 European companies operate in India, while total bilateral trade in goods reached €140 billion in 2023. And although trade between our economies has grown by about 90 per cent in the last decade, there is still plenty of room for further growth,” he noted. In this context, “the automotive sector, which fuels our economies, should be at the heart of the partnership.” Here, according to the Trade Commissioner, “Europe’s expertise in green engineering and technologies, coupled with India’s growing market and manufacturing capabilities, offers a unique combination that can boost growth, create jobs and promote sustainability in both regions.” 

In the eyes of the European Commission, car and car parts manufacturers look at the EU-India relationship not only through the lens of trade, but also through the lens of investment. “The automotive market in India is booming and prosperous” and “my goal is to ensure that the free trade agreement facilitates bilateral trade flows between India and the EU, subject to tariff liberalisation for all components, from engines to brakes” because “this would be a win-win scenario for our sectors and would in particular facilitate the introduction of new advanced technologies in India,” he said. In particular, according to Sefcovic, the EU and India, the third and fourth largest automotive markets, can “lead the charge in the development of state-of-the-art combustion engines, electric vehicles with advanced battery technologies and smart mobility solutions.” 

This discussion is part of the negotiations to conclude a free trade agreement by the end of the year. “We are maximising our efforts,” and “we are working towards an economically meaningful and mutually beneficial package,” he clarified. “The talks are ongoing,” and “given the political will on both sides, I think we are ready to meet the deadline,” Sefcovic reassured.