India eyes FTA with EU in tranches

Commerce Minister Piyush Goyal

India and the European Union (EU) are looking at an an interim or early harvest trade agreement before a larger pact in a bid to quickly close talks between them, Commerce Secretary Sunil Barthwal said on April 15.

"Better to focus on core trade issues when it comes to India, EU Free Trade Agreement (FTA). Discussing with EU what can be an early harvest or tranche so that we can do a deal faster," Barthwal added.

An early harvest deal is a trade agreement between countries or regions that allows for removal of trade barriers of certain goods or services, while leaving other items to be liberalised at a later date.

India has followed the practice of negotiating trade pact in tranches with the likes of Australia and is also currently in talks to finalise the first tranche of the same with US.

The 11th round of negotiations for the proposed FTA between India and EU is scheduled between 12-16 May, 2025 in New Delhi.

In February, India and EU agreed to ramp-up talks for the trade deal and close it by 2025-end to tide over impending troubles from tariffs.

The decision was taken during European Commission president Von der Leyen’s two-day India visit with a 27-member delegation in February.

Negotiations for the proposed trade deal were re-launched in June 2022.

The EU is India's largest trading partner, accounting for 12.2 percent of Indian trade, ahead of the US (10.8 percent) and China (10.5 percent). The 27-country bloc is the second-largest destination for Indian exports after the United States.

India is EU’s ninth-largest trading partner, accounting for 2.2 percent of its total trade in goods in 2023, well behind the US, China and the UK.