The 13th round of negotiations on the European Union–India Free Trade Agreement, held  8 to September 12 in New Delhi, ended on a downbeat note, with EU officials expressing pessimism about  the possibility of concluding a deal by the end of the year.

During their meeting in February in New Delhi, Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen called for the completion of the EU-India FTA negotiations  by the end of 2025, aiming to expand and strengthen bilateral trade ties in response to US President Donald Trump’s aggressive tariff policies .

Trump imposed tariffs of up to 50 percent on Indian imports and around 15 percent on most goods from the EU, prompting both India and the EU to actively seek alternative trade partners.

EU Trade Commissioner Maroš Šefčovič and Agriculture Commissioner Christophe Hansen travelled to New Delhi on 12 September for a new round of talks, but no breakthrough was achieved.

Big Challenge

“I wouldn’t hide that the negotiations are extremely challenging,” Šefčovič told the Brussels-based publication Euractiv . Even after agreeing to leave out some food produce from negotiations, he said , clinching what would become the bloc’s biggest trade deal by year’s end would still be a “big challenge.”

 The EU Commissioner insisted that the deal with India needed to be “commercially meaningful” to pass muster with the European Parliament in Strasbourg and national EU governments. “Clearly we are not there yet,” he noted.

 EU Ambassador in  New Delhi,  Hervé Delphin, told  India's World Magazine event that the 13th round of negotiation in September was a bit of a “missed opportunity “ to make some breakthrough.

“The EU was and is still ready to conclude on a meaningful package. We look forward to India engaging in earnest and moving, like the EU has shown readiness to do, towards a mutually beneficial deal,” he said .

On his part, the EU’s lead negotiator Christophe Kiener told the  European Parliament’s Trade Committee last week that the EU-India negotiations “remain extremely challenging,”. “It was absolutely expected  that when we start negotiating on the most difficult issues, the most sensitive areas, it would not be easy.”

  “Number thirteen, in European traditions, seems to be a difficult number,” he added. Kiener admitted  that New Delhi might force the EU to “readjust” its trade approach to meet the 2025 deadline.

Positive Mood

Yet, despite the previously gloomy outlook, recent geopolitical developments have shifted the mood surrounding the EU-India talks in a more positive  direction ahead of the 14th round of their  trade negotiations set to begin in Brussels on Monday, October 6.

India and the European Free Trade Association (EFTA) signed the Trade and Economic Partnership Agreement (TEPA) on March 10, 2024, which came  into effect on October 1. EFTA is the intergovernmental organisation of Iceland, Liechtenstein, Norway and Switzerland.

Under the agreement, India will cut tariffs on 80–85% of goods coming from these countries to zero, while Indian exporters will get duty-free access to 99% of goods in EFTA markets. The two sides have also committed to invest USD 100 billion and create million direct jobs over the next 15 years as part of the deal.

In July, India signed a FTA with the UK, which is set to come into effect by 2026.

 On 23 September, the EU and Indonesia finalised their negotiations on the ‘Comprehensive Economic Partnership Agreement. The deal lifts tariff barriers on 98% of EU products exported to Indonesia. The agreement frees up access for the vast majority of EU agricultural products exported to the Indonesian market. The EU exports around a billion euros' worth of such products to Indonesia, with about one-third being dairy products.

These positive developments are likely to encourage the EU and India to accelerate their FTA negotiations in hopes of reaching a deal by the end of the year.

Moreover, the EU and India are stepping up their diplomatic and political engagement to achieve this goal.

Indian  Commerce and Industry Minister Piyush Goyal is expected to meet EU’s Trade Commissioner Maroš Šefčovič at the sidelines of G20 trade ministers’ meeting in South Africa this week.   Goyal will not be joining next week’s trade negotiations in Brussels.

On Tuesday 7 October, the European Parliament will debate EU efforts to strengthen ties with India as part of a new strategic agenda. The debate is expected to focus on how the EU and India can work together on promoting prosperity and sustainability, technology and innovation, security and defence and connectivity, among other things.

 The European Parliament in a statement noted that “although India is one of the world’s fastest-growing large economies, it ranks only ninth among the EU’s largest trading partners. It accounted for  just 2.4% of total EU trade in goods in 2024, well behind the US (17.3%), China (14.6%) and the UK (10.1%). The EU is meanwhile India’s second-largest trading partner, generating trade in goods worth 120 billion euro in 2024, or 11.5% of India's total trade.”

The European Commission, which is the EU's executive body, adopted a policy paper on a 'New Strategic EU-India Agenda' on 17 September. It should set the scene for negotiations on a new common EU-India strategic agenda, to be adopted at the  January 2026 bilateral summit. The European Council which represents the 27 EU member states is expected to endorse the strategy document during its summit on 23-24 October.

The European Parliament’s International Trade Committee will send a mission to India from October 27th to 29th and include meetings with India's Finance Minister Nirmala Sitharaman, Indian External Affairs Minister S Jaishankar Commerce and Industry Ministry Piyush Goyal.

The EU-India  FTA covers 23 policy areas or chapters, including trade in goods and services, investment, etc.

Basmati Row

Next week’s Brussels meeting will try to sort out outstanding  differences, including agriculture, tariffs on cars, wines and spirits, and India’s resistance to the EU’s Carbon Border Adjustment Mechanism. A new irritant has now been added - an India-Pakistan dispute over the two countries’ rival claims to Basmati rice. New Delhi wants to designate Basmati rice as Indian but if the EU does so, it risks  a row with Pakistan.

The Secretary General of  the Europe India Chamber of Commerce,  Sunil Prasad, dispatched a letter to  Sefcovic and to EU foreign policy chief  Katya Kallas disputing Pakistan’s claim to the Geographical Indication of Basmati rice.

“The special characteristic of Basmati is grown and produced in all districts of the states of  Punjab, Haryana, Delhi, Himachal Pradesh, Uttarakhand, as well as in specific districts of  western Uttar Pradesh and Jammu and Kashmir” he said.

“In this context, Pakistan's claim that the country has a long history of cultivating this rice  is historically and scientifically incorrect, and Pakistan's claim for the European Union GI tag of  Basmati Rice is unfounded, untenable and misguided,” stressed Prasad.

Over the next three months, global attention will turn to the outcome of the EU-India FTA talks which, if concluded successfully, could become the world’s largest trade deal.

(The author is an Indian journalist who is a long time resident in Brussels and has been covering European and EU affairs for the past 40 years. Views expressed are personal . He can be reached at nawab_khan@hotmail.com X: @NawabKhan10)