Overview of India-EU Free Trade Talks

India and the European Union (EU) are in negotiations to finalize a Free Trade Agreement (FTA) by the end of 2025. The agreement aims to strengthen economic ties by reducing trade barriers and enhancing cooperation in various sectors, with a significant focus on investment protection, digital trade interoperability, and lower tariffs on textiles.

India-EU Trade Figures (USD Billion)

Financial Year	Exports to EU	Imports from EU
FY21	$41.3B	$39.7B
FY22	$64.9B	$51.4B
FY23	$74.8B	$61.0B
FY24	$75.9B	$61.4B
FY25 (Apr-Nov)	$50.6B	$38.0B

Key Trade Sectors

• India’s Key Exports to the EU: Textiles, chemicals, pharmaceuticals, and leather products.
• India’s Key Imports from the EU: Machinery, chemicals, and electronics.

Major Negotiation Points

• India seeks recognition as a data-secure country to boost IT and digital trade.
• Easier access for Indian skilled professionals to work in the EU.
• Lower tariffs on textiles and chemicals to enhance exports.
• EU demands lower import duties on cars and alcoholic beverages.
• The EU seeks access to India’s government procurement market.

Trade Challenges and Irritants

• India’s import duties on ICT products and compliance with EU’s green regulations.
• EU’s Carbon Border Adjustment Mechanism (CBAM) impacting Indian exports.
• India’s quality control orders (QCOs) affecting European exports to India.

Proposed Changes to Tariffs on Textiles

Aspect	Details
Lower Tariffs	India is advocating for reduced tariffs on textile exports to the EU, increasing competitiveness.
EU Import Duties	The EU may lower its import duties on Indian textiles, enhancing trade volume.
Market Access Agreements	The FTA is expected to ease entry for Indian textile manufacturers into the EU market.
Mutual Recognition of Standards	Negotiations include streamlining standards and certifications to facilitate trade.
WTO Context	India’s textile tariffs could be reviewed under WTO guidelines, influencing the final deal.
Digital Trade Interoperability	Technology-driven trade facilitation could further ease textile transactions.

Conclusion

The India-EU FTA negotiations are geared toward reducing textile tariffs, expanding market access, and aligning compliance measures. While progress is being made, the final agreement will determine the extent of tariff reductions and regulatory changes, shaping the future of India-EU textile trade relations.