India-EU FTA nears finish line with EVs and farm goods in spotlight: Report

More than 20 themes are on the table in the India-EU negotiations, including trade in goods and services, investment protection, customs cooperation, intellectual property and sustainability

India and the European Union (EU) are moving closer to finalising a long-delayed free trade agreement (FTA), having narrowed their differences on sensitive issues such as electric vehicles (EVs) and agricultural products, according to two people cited by The Mint.

Negotiators are considering a template similar to the India-UK trade deal, which removed duties on nearly all Indian farm exports, the sources told The Mint on condition of anonymity. New Delhi is also weighing concessions, including reduced tariffs on European whisky and limited access for EU companies in government procurement.

India expects the FTA to secure tariff concessions for labour-intensive goods such as textiles, gems and jewellery, agricultural produce, and engineering products, one of the people told The Mint. "Most of the contentious points could be settled during the meeting between commerce minister Piyush Goyal and EU trade and economic security commissioner Maroš Šefčovič. If any items remain unresolved, another round of discussions will be organised to speed up the pact," the person said.

Goyal will meet Šefčovič on Friday, while a 28-member delegation from the EU's Political and Security Committee is holding parallel talks in New Delhi, The Mint reported. The team includes the committee's chair, Ambassador Delphine Pronk, along with envoys from 27 EU member states.

The India-UK accord offers duty-free entry to Indian-made EVs and phases down tariffs on premium UK EVs. On agriculture, it grants Indian products such as spices, seafood and processed foods duty-free access to Britain, while safeguarding India's domestic dairy, edible oil and apple markets, The Mint noted.

More than 20 themes are on the table in the India-EU negotiations, including trade in goods and services, investment protection, customs cooperation, intellectual property and sustainability. The talks are unfolding amid New Delhi's tense trade relations with Washington, following former US president Donald Trump's steep duties on Indian exports, including penalties tied to India's ties with Russia, according to The Mint.

Indian negotiators are also pressing for waivers from the EU's Carbon Border Adjustment Mechanism (CBAM), which could burden domestic industries, people familiar with the discussions told The Mint. The 13th round of FTA talks began in New Delhi last Monday.

Spokespersons from India's commerce and external affairs ministries, as well as the European Commission, did not reply to emailed queries, The Mint said.

Both sides are aiming to seal the agreement by the end of the year, which could boost Indian exporters' presence in Europe amid a challenging global trade environment, The Mint reported.

The EU is India's second-largest trading partner, with bilateral goods trade valued at €120 billion in 2024 - 11.5% of India's overall trade. India ranks as the EU's ninth-largest partner, accounting for 2.4% of the bloc's trade, trailing the US, China and the UK, European Commission figures cited by The Mint show. Trade in goods between the EU and India has nearly doubled in the past decade.

Yet the EU's strict environmental policies - including its carbon levy, deforestation curbs and supply-chain due diligence rules - remain a sticking point, as they may increase costs for Indian exporters, the Global Trade Research Initiative said in a report highlighted by The Mint. Under CBAM, Indian shipments of steel, aluminium and cement could face tariffs of 20-35% even with an FTA, the report warned.

Industry associations are closely watching the progress. Prabhu Dhamodharan, convenor of the Coimbatore-based Indian Texpreneurs Federation, told The Mint that duty-free entry into Europe could significantly raise India's share of the bloc's $85-90 billion apparel imports - currently just 6%. With focused efforts, he estimated, the FTA could generate an additional $3-4 billion for India's textile and garment sector initially, with potential for double-digit market share in the longer term.