New Delhi. India and the European Union (EU) are close to finalizing the world’s largest trade deal. According to Forbes report, India’s Commerce and Industry Minister Piyush Goyal recently held an important meeting with the trade ministers of the European Union in Brussels. In this meeting, both sides held talks to finalize the Free Trade Agreement (FTA), which came into force in June 2022.
There have been attempts for a free trade agreement between India and the EU earlier in history. These talks started in 2007, but had to be postponed in 2013 due to the then geopolitical circumstances. Now, due to global circumstances and tariffs imposed by the US, this agreement has become the need of the hour for both India and Europe.
America and China’s influence
US tariffs and H-1B visa restrictions have forced India to look towards new markets. At the same time, China’s control over the supply of rare minerals has affected production in Europe, especially in the automobile and machine tools sectors. In such a situation, India, which is a major producer of neodymium and other important minerals, can become a reliable supply source for Europe.
Benefits for India
Both sides are likely to get many benefits if the Free Trade Agreement is implemented between India and EU. India is estimated to gain $3.5 to 5.16 billion in the short-term. In the long term, a 20% increase in services exports and a reduction in duties on European car imports are likely to reduce production costs. Apart from this, labour-intensive sectors like garment, textile, gems and jewelery will also get big benefits.
Currently, trade between India and Europe has increased by about 90% in the last decade. The EU is India’s second largest trading partner, and India is the EU’s ninth largest. This free trade agreement will further strengthen the cooperation between the two economies.
Prime Minister Narendra Modi had said in New Delhi in February 2025 that concrete decisions have been taken to strengthen and accelerate the India-EU partnership. This deal will prove to be an opportunity not only for India but also for Europe to reduce dependence on China and strengthen the global supply chain.
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