India, EU working hard to conclude FTA by year-end

Describing India as an attractive market, the European Union (EU) said the negotiating teams of the two sides are working hard to deliver on the commitment of EU President von der Leyen and Prime Minister Narendra Modi to conclude a Free Trade Agreement (FTA) by the end of the year.

Terming the EU as India’s top trading partner, with bilateral trade in goods reaching EUR 120 billion, well ahead of the US and China, EU Ambassador Hervé Delphin said, “Bilateral trade has reached EUR 180 billion. There is huge potential for growth considering that the EU and India are the 2nd and 4th largest economies in the world. To unlock this untapped potential, the EU and India are negotiating the Free Trade Agreement (FTA).”

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At the 2nd Annual General Meeting of the Federation of European Business in India (FEBI), Ambassador Delphin highlighted the vital role of European companies in powering India’s economic growth and innovation. Marking FEBI’s first anniversary, he noted that over 6,000 EU firms operating across India, from manufacturing to ICT and professional services, have created more than 3 million high-quality jobs, contributed billions in revenue and taxes, and are actively supporting India’s “Make in India” and manufacturing ambitions. The Ambassador emphasized that EU businesses are not just investors but key partners in India’s journey toward a stronger, more resilient economy,

He underlined that President von der Leyen and Prime Minister Modi set the objective to conclude the FTA by the end of this year.

“The negotiating teams are working hard to deliver it,” he said, stressing that the negotiations are challenging and “important issues remain to be solved.” He added that the 13th round earlier in September, with the direct involvement of Commissioners Šefčovič and Hansen, did not result in the expected breakthrough.

Asserting the EU’s commitment to conclude the FTA soon, he said, “The EU was and is still ready to conclude a meaningful package. We look forward to the next round and further negotiations towards a mutually beneficial deal.”

“Alongside the FTA, the EU and India are negotiating an Investment Protection Agreement,” he added. “The agreement aims to create a predictable, secure, and transparent environment for EU and Indian investors, helping generate the higher levels of FDI needed for the Indian economy. While certain differences remain, both the EU and India agree on key principles: the right of states to regulate must be explicitly safeguarded, and tribunals must have clear guidance on interpreting investment protection standards. These shared principles should guide us throughout the negotiating process toward a successful outcome.”

In 2024, EU companies in India generated a total turnover of EUR 186 billion, around 5 percent of India’s economy. They exported goods worth EUR 23.5 billion, accounting for approximately 6 percent of total Indian exports, and paid more than EUR 7 billion in taxes. These figures reflect tangible benefits for Indian employees, families, society, and the economy.

The case for the FTA and Investment Protection Agreements is stronger than ever. “Our economies are complementary and offer each other scale,” he said. “The FTA can open new opportunities for EU and Indian businesses and create conditions to significantly increase bilateral trade and investment. While some countries are raising tariffs or closing markets, we should use the FTA to diversify trade, hedge against uncertainties, and strengthen supply chains.”

Highlighting Europe’s approach to trade, he added, “Europe’s art of the deal is to drive positive-sum FTAs that deliver tangible benefits.”

He also emphasized that while the FTA and Investment Agreements “can be game changers, there is more in EU-India economic relations.” Referring to a Joint Communication released by the European Commission and High Representative Kaja Kallas, he noted that it sets out the EU’s vision for India through a new EU-India Strategic Agenda.

Among its five pillars, most of which connect to the economy and business,are: Prosperity and Sustainability: boosting trade, investment, and economic ties with a focus on supply chains and clean transition; Technology and Innovation: collaborating on critical emerging technologies to reduce dependencies and leverage combined strengths;Security and Defence: deepening cooperation on shared risks while fostering collaboration in the defence industry;

Business and Investment Enablers: including proposals such as an EU-India Business Forum (CEOs), innovation hubs to mobilize start-ups, Blue Valleys as dedicated platforms for private sector engagement in selected value chains, TTC 0.2 focusing on critical supply chains like semiconductors, active pharma ingredients, clean tech, and biotech, and a gateway office to facilitate mobility of skilled ICT workers.