Trade Talks
India, EU asked respective teams to close FTA talks this year, says PM Modi
This story was originally published at 15:37 IST on 28 February 2025
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--PM Modi: India, EU asked respective teams to conclude FTA talks this year
NEW DELHI – India and the European Union have instructed their respective trade negotiation teams to close the ongoing discussions for a free trade agreement by the end of this year, Prime Minister Narendra Modi said Friday in a joint press conference with European Commission President Ursula von der Leyen.
With this, von der Leyen, who was accompanied by the EU College of Commissioners, concluded her two-day visit to New Delhi.
The two leaders, at the meeting, also agreed to make strong efforts to take forward the India-Middle East-Europe Economic Corridor initiative, Modi said. India and the EU have decided to strengthen investment framework and take steps for investment protection, he added.
For Europe, India is a pillar of certainty in an increasingly uncertain world, von der Leyen said after the meeting. She also reiterated the EU's intent to conclude the negotiations for the free trade agreement on priority.
In 2007, India and the EU had launched negotiations for a broad-based trade and investment agreement, but the discussions were suspended in 2014 following differences over market access. The negotiations for a trade agreement resumed in June 2023 after a gap of nine years.
The two regions are set to hold the next round of talks for the trade deal in March at Brussels. The previous round of negotiations were held in September. The EU's proposal of Carbon Border Adjustment Mechanism and regulation on deforestation products are some sensitive subjects that are lately being discussed at the negotiations. The EU's measures to mitigate climate change are seen posing non-tariff barriers for India.
Under the proposed deforestation regulations, effective 2026, products exported to the EU will have to meet new rules relating to the land on which they were produced. Exporters will have to ensure that the land has not been subject to deforestation or forest degradation since Dec. 31, 2020.
Under the Carbon Border Adjustment Mechanism, those exporting goods to the EU have to report the carbon content of the commodity, which will determine the tax on it. The carbon tax collection is expected to begin from 2026. These measures by the EU may affect the profitability of Indian exporters, as Europe is among the top export destinations for the country. India's total trade with the EU was $137.41 billion in 2023-24 (Apr-Mar), with imports at $61.48 billion and exports at $75.93 billion. End
US$1 = INR 87.50
Reported by Kuldeep Singh and Krity Ambey
Edited by Tanima Banerjee
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