India, EU Unite Amid Trump Threats, Agree On Free Trade Deal
India-West News Desk
NEW DELHI – India and the European Union have set a year-end deadline for concluding a long-pending free trade agreement, marking their first firm commitment to a timeline after years of negotiations, Reuters reported. The decision, announced on February 28 during European Commission President Ursula von der Leyen’s visit to India, comes as both sides seek to counter the impact of potential tariff hikes from the United States under former President Donald Trump’s proposed trade policies.
Von der Leyen and Indian Prime Minister Narendra Modi revealed the timeline at a joint press conference, emphasizing the need to finalize negotiations that have faced multiple roadblocks. Talks for the agreement had stalled for eight years before resuming in 2021, Reuters noted. India, one of the world’s most protected markets, has been reluctant to lower tariffs, while the EU has been hesitant to ease visa restrictions for Indian professionals.
“We have prepared a blueprint for collaboration in the areas of trade, technology, investment, innovation, green growth, security, skilling, and mobility,” Modi said, adding that officials have been tasked with completing the deal by the end of 2024.
The EU is India’s largest trading partner in goods, with bilateral trade increasing nearly 90% over the past decade to reach $137.5 billion in the 2023/24 fiscal year. Von der Leyen called for an “ambitious” trade and investment agreement, highlighting sectors such as batteries, pharmaceuticals, semiconductors, clean hydrogen, and defense as key areas of cooperation.
The timing of the announcement is significant, given Trump’s threats to impose reciprocal tariffs on all nations, including the EU and India, by April 2025. “We both stand to lose from a world of spheres of influence and isolationism, and we both stand to gain from a world of cooperation and working together,” von der Leyen stated. “But I believe this modern version of great-power competition is also an opportunity for Europe and India to reimagine their partnership.”
The negotiations have faced persistent challenges. The EU has pushed for India to reduce tariffs exceeding 100% on imported cars, whiskey, and wine, while India has sought greater access for its pharmaceuticals and chemical exports. Additionally, New Delhi wants reduced tariffs on textiles, garments, and leather products, and has objected to the EU’s proposed carbon border tax, set to impose tariffs of 20% to 35% on high-carbon goods like steel, aluminum, and cement from January 2026, Reuters reported.
