Days after Prime Minister Narendra Modi and European Union leaders discussed an “early conclusion” of the India-EU FTA, two top negotiators of the EU, in-charge of trade and agriculture, are coming to India this week to hold talks on resolving knotty issues of the deal.
European Commissioner for Trade Maros Sefcovic and Commissioner for Agriculture Christophe Hansen will be in Delhi this week to lead the negotiations, their first visit since February this year when the College of Commissioners travelled to India.
These two Commissioners, who are equivalent to Cabinet Ministers, will be leading a 30-member negotiating team from Brussels and will meet their counterparts in Delhi, Commerce Minister Piyush Goyal and Agriculture Minister Shivraj Singh Chouhan.
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The EU visit is aimed at expediting the negotiations to seal the final deal. Talks between India and the EU have gained urgency in the light of the tariff war unleashed by the Trump administration.
The upcoming round of negotiations assumes significance as it follows the announcement of the EU-US deal. The EU has indicated flexibilities for the US on the contentious Carbon Border Adjustment Mechanism (CBAM).
Officials in the Commerce and Industry Ministry said Delhi will now push for similar concessions since the EU had earlier taken a rigid approach on CBAM in negotiations with India.
Herve Delphin, EU Ambassador to India, had told The Indian Express at its Idea Exchange programme in June that the EU’s CBAM was not a trade measure and “not part of trade and the FTA”.
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European Commission President Ursula von der Leyen and European Council President Antonio Costa during their call with Prime Minister Narendra Modi Thursday. (Image source: X@eucopresident)
“It’s about compliance with our climate agenda to accelerate decarbonisation,” Delphin had said.
In an interview with The Indian Express on September 3, Urjit Patel, India’s newly appointed Executive Director at the International Monetary Fund, said, “The US has basically driven a truck through CBAM”.
Negotiations over CBAM are crucial as the Indian industry has begun facing the impact of the regulation that is to come into effect January 1, 2026.
Pankaj Chadha, Chairman, Engineering Export Promotion Council (EEPC) of India, said, “The annual compliance cost to meet CBAM requirements for a MSME is around Rs 15 lakh. We have asked for support from the government. We are already facing challenges in the US market.”
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Experts said that unlike the US – its recent 50 per cent steel and aluminium tariffs are harsh but clearly defined – the EU’s trade barriers are complex and opaque. Data showed that steel and aluminium shipments to the EU dropped by 24.4 per cent – from $7.71 billion to $5.82 billion in FY25 compared to the previous financial year.
On September 4, Prime Minister Modi and President of the European Commission Ursula von der Leyen and President of the European Council Antonio Costa spoke on phone and discussed “early conclusion of the India-EU FTA”.
According to sources, the two sides have to negotiate about 26 or 27 chapters in all – each of them tackling different issues and themes – as part of the trade agreement.
Of these 27 chapters, the two sides have been able to close or conclude negotiations on 11 chapters so far — these include intellectual property rights, customs and trade facilitation, transparency, good regulatory practices, mutual administrative assistance, small and medium enterprises, sustainable food systems, dispute settlements, competition and subsidies, digital trade and anti-fraud practices. They are expected to conclude the chapter on capital movements in the next round of negotiations, sources said.
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The substantial progress in the digital trade chapter is significant since India’s booming service sector could benefit the most from integration with the EU. The digital trade chapter in trade negotiations typically addresses rules and commitments related to online commerce and sticky issues such as cross-border flow of data and digital services.
Commerce Ministry officials have said that they have fast-tracked EU trade negotiations by holding monthly talks with the 27-member bloc. In the last 12 months, India and the EU had conducted four rounds of negotiations.
The chapters on sanitary and phytosanitary issues and agriculture are expected to be one of the most contentious ones, apart from the issues related to whisky, cars, automobiles.
Sources said Agriculture Commissioner Hansen’s visit is crucial since agriculture has been a hot-button issue for India and Europe. It is learnt that the two sides have agreed to keep “dairy, sugar and rice out of the agriculture trade negotiations”.
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The two sides, sources said, have seen a window of opportunity in the current geo-economic and geo-political climate, given the Trump administration’s tariffs on strategic US partners like India and the EU.
Delhi is keen to conclude the deal with the EU by the end of the year, and they are looking at a full-trade deal, as they negotiate with the US on the trade deal.
Sources said the US administration’s actions are “spurring” the India-EU negotiations so that they can close the deal by the end of the year. This will be in time for the India-EU leaders’ summit early next year – the deadline under which the two sides are working on.
Besides India, the EU is also negotiating trade deals with Indonesia, Malaysia, Philippines and UAE.
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As one of India’s largest trading partners, the EU accounted for €124 billion worth of trade in goods in 2023 or 12.2% of total Indian trade. India accounted for 2.2% of the EU’s total trade in goods in 2023. Trade in services between the EU and India reached €59.7 billion in 2023, up from €30.4 billion in 2020.