Here's all you need to know about the proposed India-EU FTA

India and EU

India and the European Union are set to hold talks for a free trade deal when a European Commission president Ursula von der Leyen-led delegation arrives in New Delhi on February 27.

The visit comes at a time when US President Donald Trump is single handedly rewriting the rules of global commerce by threatening and also imposing tariffs, forcing countries to revisit the way they do business.

Von der Leyen, who will be on a two-day visit, is expected to hold talks with Prime Minister Narendra Modi and his senior ministerial colleagues.

The discussions in Delhi come days ahead of the next round of FTA talks between the two sides. India and EU have held nine rounds of FTA talks and the tenth will be held in Brussels from March 10-14.

The EU is looking at an "ambitious" as well as a "commercially meaningful" free trade agreement (FTA) that addresses tariffs and non-tariff barriers, a senior EU official has said.

The official identified Indian tariffs among the “outstanding” issues between the 27-member grouping and India.

What India wants

India is advocating for concessions for its micro, small and medium enterprises (MSMEs). This comes amid concerns over the impact of EU's Carbon Border Adjustment Mechanism (CBAM), which could result in higher duties on Indian steel and aluminium products.

India is also seeking greater integration with the EU's services sector and increased skilled labour mobility opportunities, The Indian Express said.

Textile exports are also one of the key concerns for India, as it faces an additional 10 percent duty compared to competitors due to the absence of an FTA, the report said.

The removal of the additional duty will create a level-playing field for Indian exporters.

What EU wants

The European Union is pushing for lower tariffs on key exports such as whiskey, wine, and cars, as part of the ongoing negotiations for FTA.

"India's market remains relatively closed, particularly for key products of interest to the EU and our industries…We expect stronger commitments from India, not just on tariffs but also on non-tariff barriers and procurement rules," the report quoted an EU official as saying.

EU is India's largest trading partner after the United States. Earlier in a press release, the government called the proposed deal one of the most "significant FTAs for India".

The talks with EU comes within days of India holding similar talks with the United Kingdom, which withdrew from the European  Union in 2020.

Commerce and industry minister Piyush Goyal said on February 24 India and the UK have decided to restart negotiations on an FTA, almost a year after talks stalled in May 2024 ahead of the general elections in the UK.