- EU-India free trade agreement aims for 2024 conclusion after 13-year negotiation stalemate
- Two-way trade surpasses $130B annually with 90% growth since 2014
- 6,000+ European firms in India drive pharma and manufacturing investments
The European Union and India have launched an unprecedented push to finalize their long-delayed free trade agreement, a move that could create the world's largest economic partnership. European Commission President Ursula von der Leyen's recent New Delhi summit with Prime Minister Narendra Modi signals renewed urgency, with both leaders committing to resolve longstanding disputes over automotive tariffs and liquor market access by December 2024.
Industry analysts highlight three critical factors accelerating negotiations: shifting U.S. trade policies under potential Trump leadership, China's expanding Asian infrastructure projects, and India's recent $100 billion investment pact with European Free Trade Association nations. The proposed EU-India deal would cover 1.9 billion consumers across 31 countries, creating alternative supply chains to reduce reliance on Chinese manufacturing.
Digital infrastructure collaboration emerges as a unique growth area, with EU companies eyeing India's 800 million internet users for green tech solutions. Brussels plans to deploy $3.4 billion in climate funds for joint smart city projects in Mumbai and Hyderabad, while New Delhi seeks European expertise to develop its semiconductor industry through Bengaluru-based tech hubs.
The agreement's defense component could reshape Asian security dynamics, with EU members offering submarine propulsion systems in exchange for access to India's coastal surveillance networks. This strategic depth counters China's Belt and Road Initiative, particularly in Sri Lanka where both blocs aim to jointly develop the Colombo Port City project.
Despite optimism, agricultural subsidies and data localization rules remain contentious. German automakers demand 70% tariff reductions on luxury vehicle imports, while French winemakers push for geographical indication protections against Indian imitations. Negotiators are crafting phased implementation timelines to address these concerns without derailing the broader pact.
