As the clock ticks towards Republic Day, the million dollar question: will the President of the European Union Ursula von der Leyen be the chief guest at the parade? On the answer to that question rests the answer to the other: that the India-EU FTA is on course to be signed.
Randhir Jaiswal, foreign ministry spokesman was cautious, merely stating that “The teams have remained in touch to discuss outstanding issues, and both sides are engaged in taking these discussions forward.”
Commerce Secretary Rajesh Agrawal was also reported as saying that India and the EU are narrowing differences through sustained engagement, with more physical and virtual meetings planned.
Could negotiations go down to the wire given that the EU is keen on India opening up its agricultural and dairy markets? What about the Carbon Border Adjustment Mechanism that now comes into force, impacting steel and aluminium? CBAM risks eroding India’s export competitiveness just as trade diversification becomes most critical.
Or will the pressure to realise an India FTA push EU negotiators to cut Delhi some slack in these areas? Ajay Srivastav of the Global Trade Research Institute (GTRI) says negotiations are on a fast track, with both sides aiming for an early 2026 conclusion.
“The expected announcement of an India–EU Bilateral Trade & Investment Agreement (its official name) in early 2026 could offer India some relief at a time of rising global trade uncertainty,” he says. “With the U.S. imposing a 50% tariff regime, India’s exports to its largest market have already taken a hit, falling 21% in November 2025 compared with May.”
It would be India’s largest trade deal, covering goods trade of more than $140 billion and spanning over 20 trade and non-trade areas.
Srivastava underlined the importance of the EU as an export destination, noting that in 2024 India exported $91 billion worth of goods to the bloc, led by petroleum products, electronics including smartphones, textiles and garments, iron and steel, machinery, chemicals, pharmaceuticals, gems and jewellery, and auto components.
Many of these sectors, particularly labour-intensive industries such as textiles, garments, leather, and auto parts, face EU tariffs ranging from 6% to 20%. An FTA could significantly reduce these duties and help restore export competitiveness.
Dr Ajay Sahai, Director General and CEO of the Federation of Indian Export Organisations (FIEO), described the agreement as transformational for Indian exporters.
“The long-awaited India–EU Free Trade Agreement is a landmark step that promises to reshape the global trade landscape for Indian goods and services,” he said. “A comprehensive FTA will unlock far greater potential by reducing tariff and non-tariff barriers across a wide range of sectors.”
Dr Sahai said Indian goods from textiles and engineering products to pharmaceuticals and specialty chemicals stand to gain from more predictable and preferential access to European markets, while services trade would benefit from clearer, rules-based entry conditions.
“The EU FTA presents an alternative avenue to sustain growth, diversify market dependence, and thereby de-risk India’s export ecosystem,” he said.
Beyond trade economics, the anticipated announcement is also diplomatically significant. Both sides share concerns around supply chain resilience, strategic autonomy, and the need to move beyond rhetorical commitments toward tangible cooperation.
