India and the EU will sign a free trade agreement by the end of the year. Negotiations on it lasted 18 years

India and the European Union have agreed to conclude a free trade agreement by the end of this year. This was announced by European Commission President Ursula von der Leyen and Indian Prime Minister Narendra Modi at a joint press conference, Reuters reports.

As noted, both sides have been trying for years to conclude a free trade pact that would include significant concessions from India. Negotiations on the agreement between India and the EU resumed in 2021 after an eight-year hiatus.

“We have prepared a plan for cooperation in the areas of trade, technology, investment, innovation, green growth, security, skills and mobility,” Modi said.

The EU is India’s largest trading partner in goods, with bilateral trade growing by about 90% over 10 years and reaching $137.5 billion in the 2023-2024 financial year.

Von der Leyen called for an “ambitious” trade and investment deal that could cover sectors from batteries and pharmaceuticals to semiconductors, clean hydrogen and defence.

The EU wants India to reduce tariffs from 100% (and more than 100% for some goods) on imported cars, whisky and wine, while India seeks to expand access to the EU market for its cheaper medicines and chemicals.

India also wants to reduce tariffs on exports of textiles, clothing and leather goods. It also opposes an EU proposal to impose tariffs of 20% to 35% on high-carbon goods, including steel, aluminium and cement, from January 2026.

Free trade negotiations between the European Union and India began in 2007 but were suspended in 2013 due to disagreements on key issues such as tariffs on goods, access to services markets and intellectual property. Negotiations officially resumed in June 2022.

Tags: EU, India