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Prime Minister Narendra Modi announced Friday that India and the EU will aim to finalize a "mutually beneficial" free trade agreement by the end of the year. The announcement came after a meeting with EU Commission President Ursula von der Leyen in New Delhi, where both leaders tasked their teams with achieving the deadline.
Von der Leyen, who is on a two-day visit to India with her college of commissioners, is seeking to hedge against souring relations with the United States and said they were "expecting a lot from our trade negotiators".
Deeper access to India's rapidly expanding market was at the top of the delegation's agenda, and the EU chief looked visibly pleased after her meeting with Modi and his ministers. The EU is already India's largest trading partner, accounting for 124 billion euros ($130 billion) worth of trade in goods in 2023 -- more than 12 percent of total Indian trade, according to Brussels.
The Indian market offers many opportunities for sectors ranging from defence to agriculture, cars and clean energy. Yet, protected by high tariffs, it currently accounts for only 2.2 percent of EU trade in goods.
The bloc is pushing for a trade deal that lowers entry barriers for its cars, spirits, wines and other products. India meanwhile hopes for higher EU investments in areas such as clean energy, urban infrastructure and water management. New Delhi is also pushing for easier mobility for its skilled workforce and higher investments for ventures in India.
Von der Leyen's visit, billed as the first of its kind to the world's fifth-largest economy, comes days after US President Donald Trump announced a slew of tariffs against both friends and foes.
The EU also hopes to find common ground with India on their shared concerns over China's growing influence in the Asia-Pacific, building resilient supply chains, and the governance of new technologies including artificial intelligence.
