India and EU Set to Finalize Trade Agreement by 2025

In a significant development for international trade relations, Indian Prime Minister has announced that India and the European Union (EU) are on track to finalize a free trade agreement (FTA) by the end of 2025. This announcement was made during a visit from Ursula von der Leyen, the President of the European Commission, who is in India to strengthen bilateral economic ties.

Modi emphasized the importance of crafting a deal that would be mutually advantageous for both parties. He stated that teams from both India and the EU have been tasked with the objective of reaching a comprehensive agreement by the conclusion of this year. The Prime Minister expressed optimism that this visit would invigorate their partnership, describing it as a catalyst for transforming ambitions into actionable outcomes.

The EU has been intensifying its efforts to secure this trade agreement as a proactive measure in light of potential tariffs imposed by the United States. The two entities have been in discussions for several years, although earlier negotiations faced hurdles, particularly concerning intellectual property rights and market access for specific sectors such as automotive and alcoholic beverages.

In addition, von der Leyen highlighted the EU's interest in exploring a defense and security partnership with India, aiming to establish cooperation similar to that seen with Japan and South Korea. She remarked on the shifting dynamics of global power and expressed hope that this partnership could redefine cooperation between India and the EU.

Notably, while the EU represents India's largest trading partner, India has maintained a complex relationship with Russia, particularly in defense procurement. This context adds a layer of strategic importance to the ongoing discussions between India and the EU regarding supply chain diversification and reducing reliance on China.

As the next round of negotiations approaches in March, both parties are poised to address outstanding issues with the aim of moving forward. The anticipated agreement is seen as a critical step in fostering closer economic ties and facilitating a more robust partnership in the face of global challenges.