India and the European Union have entered the final round of negotiations for a comprehensive free trade agreement, with officials from both sides indicating that a deal could be concluded by mid-2026. The talks, which resumed in 2022 after a decade-long hiatus, have made significant progress on tariff reductions, services market access and investment protection provisions over the past two years.
Key sticking points that remain include India's demand for greater mobility for skilled Indian professionals in EU countries, the EU's insistence on including sustainability and labour standards clauses, and disagreements on tariff phasedown timelines for sensitive sectors like automotive, agriculture and dairy products. Indian trade officials expressed cautious optimism that these gaps can be bridged in the final round.
The India-EU FTA, once concluded, would be one of the world's largest bilateral trade deals, covering annual bilateral trade of over $120 billion. It would provide significant benefits for Indian exporters of IT services, pharmaceuticals, textiles and engineering goods, while European companies would gain better access to India's growing consumer market. The deal is seen as strategically important for both sides in the context of shifting global trade dynamics.
