EU and India are nearing a landmark free trade deal that could link 2 billion consumers, reshape supply chains and deepen strategic ties
The European Union and India appear closer than ever to concluding a free trade agreement that has been more than 15 years in the making, as European Commission President Ursula von der Leyen signalled renewed momentum during the World Economic Forum in Davos. Speaking on the EU’s efforts to rebalance global trade ties, von der Leyen described the negotiations as approaching a decisive stage.
While stopping short of declaring victory, she suggested the deal could become one of the most far-reaching trade arrangements either side has pursued, potentially linking a combined consumer base of around two billion people and representing nearly one-quarter of global economic output.
Negotiations on the India–EU free trade agreement began in 2007 but lost momentum for nearly a decade before being revived in 2022. Since their restart, talks have been paired with the India–EU Trade and Technology Council, which has helped address complex issues around digital rules, supply chains and emerging technologies, moving discussions well beyond traditional trade barriers.
Geopolitical shifts have injected urgency into the process. The EU is accelerating efforts to diversify supply sources, while India is positioning itself as a key alternative hub in global production networks. Trade volumes already underscore the relationship’s importance. Goods trade reached €124 billion in 2023, and services trade—dominated by IT and digital offerings, is estimated at around €60 billion. Officials on both sides believe a comprehensive agreement could significantly expand these figures, particularly in sectors such as clean energy, pharmaceuticals, advanced manufacturing and digital services.
Nonetheless, difficult issues remain unresolved. The EU continues to press India to lower tariffs on products such as cars, wine and spirits, areas New Delhi has long protected to safeguard domestic
industries. India, for its part, is pushing for greater mobility for skilled professionals, an issue complicated by differing immigration rules across EU member states. Other sensitive topics include sustainability requirements, access to public procurement markets and regulatory alignment, all of which carry domestic political implications. Acknowledging these challenges, von der Leyen stressed that negotiations are not yet complete.
Her upcoming visit to India is widely viewed as a critical moment. Diplomats expect the trip to help break deadlocks at the political level and provide negotiators with clearer mandates. The visit also precedes an India–EU leaders’ summit later this month, where both sides hope to showcase tangible progress, or even seal the deal. Should the agreement succeed, it would rank among the EU’s most consequential trade accords in recent years and mark a significant step in India’s deeper integration into global supply chains. Beyond boosting trade and investment, it would expand cooperation on technology and standards, while signalling a strategic alignment at a time when the global trading system is undergoing profound change.
