India, EU Move Closer as US Trade Talks Stall
India and the European Union are moving closer to finalising a long-awaited trade agreement, a development that could mark one of New Delhi’s most significant economic milestones in recent years. Speaking on January 15, India’s Trade Secretary Rajesh Agrawal said negotiations on the deal are expected to conclude within this month, signalling fresh momentum after years of on-and-off discussions.
If completed, the agreement would become India’s largest trade pact to date, both in scope and strategic importance. It comes at a time when New Delhi is actively looking to diversify its export markets amid growing uncertainty in global trade, particularly as talks with the United States remain slow and U.S. tariff pressures continue to weigh on Indian exporters.
For both India and the EU, the deal is about more than just numbers. Officials on both sides see it as a chance to deepen economic engagement while reducing dependence on China and Russia for key supply chains and markets. In a world shaped by geopolitical tensions and shifting alliances, the proposed agreement reflects a shared desire for stability and long-term cooperation.
Bilateral trade between India and the EU reached around 120 billion euros in 2024, making the European bloc India’s largest trading partner. European companies are already major investors in India, while Indian firms have a growing footprint across Europe in sectors such as information technology, pharmaceuticals, manufacturing, and services. The trade deal is expected to give this relationship a further boost by lowering tariffs, easing regulatory barriers, and improving market access.
Negotiations, however, have not been easy. Talks have stretched over several years, often slowed by disagreements over issues such as labour standards, environmental rules, data protection, and access to sensitive sectors. Yet recent rounds of discussions suggest both sides are now more willing to compromise, driven by changing global realities and economic needs.
Indian officials believe the agreement could open new opportunities for exporters, particularly in labour-intensive sectors like textiles, leather, engineering goods, and food products. At the same time, European firms are looking for greater access to India’s vast consumer market and clearer rules for investment.
As trade talks with the United States continue to drag on, progress with the EU offers India a timely alternative. For New Delhi, concluding the deal this month would send a strong signal that it is serious about expanding its global trade footprint, even as protectionist pressures rise elsewhere.
While final details are still being ironed out, the mood around the negotiations is cautiously optimistic. If successful, the India-EU trade pact could reshape economic ties between the two partners and offer a sense of certainty in an increasingly unpredictable global trade environment.