India, EU Resume Free Trade Agreement Talks After Eight-Year Pause

The negotiations for a Free Trade Agreement (FTA) between India and the European Union (EU) officially restarted today after a gap of over eight years. Talks had stalled amid their failure to outline an equitable trade deal.

A senior Indian government official said talks accelerated after EU Commissioner for Trade and Economic Security, Maros Sefcovic’s recent visit to India. Elder Lee used the visit to explore ways to expedite the FTA negotiations between the two sides, underlining the importance of economic cooperation between the two sides.

Although the formal deadline for finalizing the agreement has not been set yet, the leaders of India and the European Commission, Prime Minister Narendra Modi and de Leyden, recently shake at a meeting in New Delhi that the framework would be done by the end of this year. The urgency reflects global trade uncertainties, particularly fears of a possible increase in tariffs under a potential return of the Trump administration.

In addition to the FTA, negotiations will cover two important agreements an Investment Protection Agreement and a Geographical Indications (GI) Agreement. The agreements include two treaties for the protection of investments and the recognition of products with specific regional characteristics.

Nevertheless, trade between India and the EU is significant. Exports of goods and services from India stood at about $76 billion and $30 billion during the FY 2023-24 to the EU, respectively. The EU exported goods worth $61.5 billion and services worth $23 billion to India during the same period.

Negotiations between both sides, keen to strengthen their economic ties, could transform thetrade aspects of their relationship and may open a channel for better market access and more foreign direct investments.