India and the European Union have agreed to go ahead with a free trade agreement this year, which will be "the largest deal of this kind" in the world, a top EU official said on Friday.
"A free trade agreement between the EU and India would be the largest deal of this kind anywhere in the world. I am well aware it will not be easy. But I also know that timing and determination count and that this partnership comes at the right moment for both of us," European Commission President Ursula Von Der Leyen told a gathering during her visit to New Delhi.
"This is why we have agreed with Prime Minister Modi to push to get it done during this year. And you can count on my full commitment to make sure we can deliver," she said.
The announcement comes amid a global tariff war sparked by US President Donald Trump, who has vowed punitive duties against allies and foes to extract trade and geopolitical concessions. Both the EU and India have been at the receiving end of Trump's planned trade offensive, even during his first term in office.
In an apparent hint to such US policy, Von Der Leyen said the 27-nation bloc, as well as India, are facing "geopolitical and geoeconomic headwinds" and "a more aggressive posture from major powers".
"The EU and India have potential to be one of the defining partnerships of the century. Our partnership will be around trade and technology, security and defence, and connectivity. Batteries, pharma, chips, clean hydrogen will be among areas of focus," the official said.
The EU is also exploring a future security and defence partnership with India, on the lines of existing pacts with Japan and South Korea.
"We're expecting a lot of our trade negotiations. We told them they should surprise us..." Leyen said in her joint press statement.
"Joint research will be done in EV batteries, marine plastics and green hydrogen. We will further our joint plan for sustainable urban development. In the field of connectivity, concrete steps will be taken to further advance the India–Middle East–Europe Economic Corridor. I am confident that IMEC will prove to be the engine that drives global commerce, sustainable growth and prosperity," PM Narendra Modi said in his statement.
Had a candid and insightful discussion with EU Trade Commissioner @MarosSefcovic over breakfast today on the India-EU FTA and the progress of the Trade and Technology Council.
Exciting times ahead as we work towards elevating our trade & investment ties to the next level as… pic.twitter.com/euzDSuk9YcMeanwhile, EU Trade Commissioner Maros Sefcovic met Union Commerce Minister Piyush Goyal to discuss the trade framework.
India and the EU entered a 'Strategic Partnership- A Roadmap to 2025' long back in 2004. The two have also been in trade pact negotiations since 2007, with the last round of talks taking place in June 2022.
The EU is India's largest trading partner in goods. Bilateral trade in goods with the EU stood at $135 billion in fiscal 2024, with exports to EU at $76 billion and imports at $59 billion.
The European grouping has been gripped with economic and security concerns as the transatlantic arrangement with the US falls apart, Russia gains an advantage in the Ukraine conflict, and it stays a laggard in the global technological race in areas like artificial intelligence.
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