India and the European Union are hammering out details for their free trade agreement, with plans to conclude negotiations by January, as New Delhi pushes to sign several new FTAs worldwide.
Indian Commerce Minister Piyush Goyal has been busy with trade talks with several countries, in addition to the EU. Indian Prime Minister Narendra Modi is signing an FTA with Oman, but significant steps are also being taken toward FTA negotiations with Chile and New Zealand. Trade Secretary Rajesh Agarwal believes that several of them will have positive outcomes in 2026.
The EU talks have been going steadily. Modi and European Commission President Ursula von der Leyen discussed in February signing the trade deal by the end of 2025. Still, Trade Commissioner Maroš Šefčovič recently admitted it won’t happen this year. He told POLITICO that it will most likely occur in the first months of 2026. Šefčovič travelled to India last week, and Goyal is expected in January to keep negotiations going.
One contentious issue is the EU carbon border tax and safeguards for steel that India would like to include in negotiations. Despite this issue, optimism still prevails with “a common determination” to be ready for either signing or ending negotiations before India’s Republic Day on 26 January 2026, where both von der Leyen and European Council President Antonio Costa will attend as guests of honour.
India is diversifying its trade strategy after being targeted with tariffs by the Trump Administration, and is trying to overcome uncertainties arising from opening new markets to trade. Negotiations over a trade deal with the US have so far been complex. India received a comprehensive 50% tariff hike from the US.
