India and EU Reach Agreement to Finalize Free Trade Agreement by Year-End

India and the EU have agreed to finalize a long-standing free trade agreement by the end of this year, aiming to strengthen cooperation across trade, technology, and defense. The leaders emphasized the importance of trust and shared values in their strategic partnership, as discussions continue to address market access challenges. The agreement comes at a crucial time amid U.S. tariff threats, with both sides optimistic about future collaborations.

On February 28, 2025, during a meeting in New Delhi, India and the European Union (EU) announced their commitment to finalize a longstanding free trade agreement by the end of this year. Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen expressed the desire to enhance cooperation in trade, technology, connectivity, and defense. Modi emphasized the importance of trust and shared democratic values at the core of the India-EU strategic partnership.

The European Commission chief characterized the proposed free trade agreement as potentially the largest of its kind globally. This initiative comes in light of rising pressures stemming from anticipated tariffs imposed by the United States on EU goods. Von der Leyen articulated the need for pragmatism and ambition in political and economic alignments, expressing her commitment to fostering collaborative efforts between India and the EU.

Negotiations for the bilateral agreement were relaunched in 2021 but have encountered challenges regarding market access for specific products, such as automobiles and alcoholic beverages. Another negotiation round is scheduled for March. With the EU being India’s largest trading partner, bilateral trade in the 2023-24 fiscal year surpassed $130 billion, reflecting substantial growth over the past decade.

Von der Leyen acknowledged the potential of the India-EU partnership in shaping this century’s geopolitical landscape. She aspires for her visit to mark the inception of a new era in bilateral relations, echoing Prime Minister Modi’s views on elevating the strategic partnership. Furthermore, the urgency of these trade discussions has escalated following the U.S. decision to levy reciprocal tariffs on goods from certain countries, including India.

In the previous year, India successfully entered into a trade deal with members of the European Free Trade Association, ensuring commitments of substantial investments across various sectors. These endeavors signify the importance placed on developing strong economic ties and collaboration between India and European nations in the current global context.

In summary, the recent agreement between India and the EU to conclude a long-awaited free trade agreement reflects a significant step towards enhanced economic integration and cooperation. Both leaders exhibit a strong commitment to fortifying their strategic partnership, addressing trade barriers, and leveraging shared democratic values to foster mutual growth in various sectors. The anticipated agreement aims to position both India and the EU favorably within the global marketplace.

Original Source: apnews.com