Asia / Europe: The proposed Free Trade Agreement (FTA) between India and the European Union is being viewed as a landmark step that could significantly transform bilateral trade relations. A free trade agreement aims to reduce or eliminate import duties on goods traded between partner economies, remove long-standing trade barriers, and accelerate export and import growth on both sides.

Once finalized, the India-EU FTA will create access to one of the world’s largest combined markets, with a population of nearly two billion people. The agreement is expected to rank among the largest trade partnerships globally, strengthening economic ties and enhancing market access for Indian industries across Europe.

An official EU delegation is scheduled to visit India from January 25 to January 27, 2021, to take forward discussions on the agreement. The visit will coincide with the 16th India-EU Summit. Diplomatic sources indicate that the delegation is also expected to attend India’s 77th Republic Day celebrations as chief guests, with expectations that the signing of the agreement could align with the high-profile visit. If concluded, the deal is likely to significantly boost Indian exports of textiles, leather goods, gems, and jewellery to European markets.

Despite the progress, certain issues remain under negotiation. These include agricultural market access, the European Union’s Carbon Border Adjustment Mechanism (CBAM), and matters related to Intellectual Property Rights. Officials note that a political-level consensus will be crucial to resolve these technical challenges. At the same time, Europe acknowledges the strategic importance of deepening economic cooperation with a fast-growing economy like India.

Beyond trade, the agreement is expected to expand cooperation in defence and security. The European Union views India as a key partner in maritime security, counter-terrorism, cyber security, and defence manufacturing. The FTA is also anticipated to benefit Indian professionals by easing visa norms for students, researchers, skilled IT professionals, and seasonal workers seeking employment opportunities across European countries.

The upcoming summit is being seen as strategically significant for India’s long-term economic and geopolitical interests. Strengthened ties with the European Union could reduce dependence on China, enhance supply-chain resilience, and reinforce India’s standing as a global economic power. Financial experts suggest that, if finalized, the agreement could attract investments worth several thousand crores into India over the next decade.