India and EU expected to announce conclusion of trade talks on Tuesday

India and the European Union are anticipated to announce the conclusion of protracted negotiations for a free commerce pact on Tuesday, opening the way in which for lowered tariffs on European automobiles and wine and expanded marketplace for Indian electronics, textiles and chemical substances, two Indian and EU authorities sources mentioned.

The announcement may observe Indian Prime Minister Narendra Modi’s assembly with European Council President Antonio Costa and European Fee President Ursula von der Leyen, who will co-chair an India-EU summit throughout their go to to India from January 25 to twenty-eight, one of many Indian authorities sources mentioned.

If finalised and ratified by the European Parliament, a course of that would take at the least a 12 months, the commerce pact would increase Indian exports akin to textiles and jewelry, the official mentioned. Negotiations had been relaunched in 2022 after a nine-year pause, gaining traction final 12 months amid rising commerce tensions.

In August, President Donald Trump doubled tariffs on Indian imports to as a lot as 50%, among the many highest on the earth.

On the World Financial Discussion board in Davos on Tuesday, von der Leyen signalled progress, stating the European Union is near concluding the settlement however acknowledged that further work stays.

The settlement comes days after the EU signed a pivotal pact with the South American bloc Mercosur, following offers final 12 months with Indonesia, Mexico and Switzerland.

Throughout the identical interval, New Delhi finalised pacts with Britain, New Zealand and Oman.

The spate of offers underscores international efforts to hedge towards america as Trump’s bid to take over Greenland and tariff threats on European nations check longstanding alliances amongst Western nations.

Bilateral commerce between India and the EU totalled $136.5 billion in 2024/25 fiscal 12 months ending March, making the 27-nation bloc considered one of India’s greatest buying and selling companions.

”Negotiators are nonetheless making an attempt to bridge variations on a number of delicate points, together with India’s reluctance to sharply reduce tariffs on auto imports,” an EU authorities supply mentioned.

Indian and EU authorities sources declined to be recognized because the matter just isn’t but public. India’s commerce ministry didn’t instantly reply to an e-mail requesting remark.

NON-TARIFF BARRIERS

A key concern for New Delhi is a variety of non-tariff limitations such because the newly launched carbon levies on imports of products together with metal, aluminium, cement, with business specialists saying there was little scope for leisure.

Obligation-free entry to the EU may assist offset losses for Indian textile and jewelry exporters within the U.S., Ajay Srivastava, founding father of the Delhi-based assume tank World Commerce Analysis Initiative, mentioned, whereas noting regulatory hurdles stay.

”An India–EU FTA would reduce tariffs on textiles, clothes and leather-based, letting Indian exporters compete extra evenly with Bangladesh and Vietnam,” he added.

The EU imports almost $125 billion of textiles yearly, the place India holds a 5–6% share versus China’s 30%, highlighting the potential positive aspects from an FTA amid rising U.S. tariffs.

India’s autos, electronics, textiles, prescription drugs and chemical substances are prone to emerge as key beneficiaries of a possible India–EU free commerce settlement, based on Jefferies.

Some delicate agricultural gadgets have been excluded from negotiations, an Indian commerce ministry official earlier mentioned.

(Aside from the headline, this story has not been edited by The press reporter employees.)