The wrapping up of discussions for the trade pact, touted as the ‘mother of all deals’, will be announced at the India-EU Summit on Tuesday. It would mark the culmination of talks which first began 18 years ago.
The legal scrubbing of the FTA text is underway and could take up to five to six months. The deal is expected to be signed later this year and may come into effect early next year. “Official level negotiations are being concluded and both sides are all set to announce the successful conclusion of FTA talks on January 27,” Agrawal said.
The FTA, from the Indian perspective, is balanced and forward-looking, which will help in better economic integration of India with the EU. It would propel trade and investments in both economies, he added.
The FTA between India and the 27-country bloc is key as they which together make up a quarter of the world’s gross domestic product and a market of 2 billion people.
European Commission President Ursula von der Leyen arrived in New Delhi on January 24 for a four-day visit. President of the European Council Antonio Costa and von der Leyen will hold summit talks with Prime Minister Narendra Modi on Tuesday.
The EU remains India’s largest trading partner for goods, with bilateral trade reaching about $136 billion in 2024-25 comprising exports worth $75.85 billion and imports of $60.68 billion.
While India exports labour-intensive, downstream and processing-based goods such to the bloc, the EU supplies capital goods, advanced technology, and industrial inputs.
The trade pact talks stalled in 2013 after 15 rounds of discussions, before being resumed in 2022. The conclusion of negotiations and finalisation of the FTA is vital for the two markets amid global geopolitical uncertainties and trade disruptions due to US tariffs. The pact is expected to cushion the impact of the steep 50% tariffs imposed by the US on India since August.
India has inked trade deals with the UK, Oman and New Zealand last year while the EU has done trade pacts with MERCOSUR, Indonesia, Mexico and Switzerland.