EU Commission chief says free trade deal with India could come this year

The head of the European Commission, Ursula von der Leyen said EU and India were pushing to get a free trade agreement during this year.

“I am well aware it will not be easy. But I also know that timing and determination counts,” von der Leyen said in Delhi, adding that such an agreement would be the largest deal of this kind anywhere in the world.

The EU Commission chief is in India accompanied by the entire College of Commissioners – the first such visit after the European parliamentary elections in June 2024.

She met Prime Minister Narendra Modi on Friday.

Speaking in the Indian capital, she said the two sides wanted to deepen trade and investment collaboration in wide ranging areas like semiconductors, AI and cleantech.

India and EU relaunched talks on a long pending free trade agreement in 2021 and are set to hold another round in March.

An India-EU summit is also being held later in the year.

Von der Leyen also said that India and EU were pushing for renewed cooperation in security and stability and were exploring a future ‘Security and Defence Partnership’ with India similar to the partnerships with Japan and South Korea.

Brussels is keen to expand its relationships in the Indo-Pacific as cracks deepen between the US and Europe over trade tariffs and Ukraine following Donald Trump’s return to the White House.

Trump has said he is planning to hit goods made in the European Union with tariffs of 25%, claiming the bloc was created to “screw the US”.

The European Union said it would react “firmly and immediately against unjustified tariffs”.

Given the backdrop, analysts say strong trade and security relations with India have become more important than ever for the EU.

A trade deal has proven difficult so far due to differences in areas like agriculture and manufacturing.

Despite renewed negotiations “the two sides have little to show for the talks thus far”, Observer Research Foundation (ORF), a think tank, said in a note.

However, some 6,000 EU companies operate in India and the bloc is India’s largest trading partner in goods, with bilateral trade reaching $135bn (£107bn) in 2022-23, nearly doubling in the last decade.

After years of scepticism about free trade deals, India is now actively signing agreements and negotiating with multiple countries and blocs.

India and the UK restarted free trade talks this week, nearly a year after negotiations were paused ahead of general elections in both countries.

Last year, India signed a $100bn free trade agreement with the European Free Trade Association (EFTA) – a group of four European countries that are not members of the European Union – after almost 16 years of negotiations.