European Commission President Von der Leyen has committed to finalizing trade discussions with India this month, as negotiations for a Free Trade Agreement between India and the European Union enter their most critical phase. India's Commerce Ministry announced that significant progress has been achieved across multiple chapters, with talks advancing on a day-to-day basis through virtual meetings as both sides work toward a comprehensive trade partnership.

Negotiation Progress and Timeline

The FTA discussions have made substantial headway with the following status:

The Commerce Ministry emphasized that both sides are working intensively to close negotiations, with Von der Leyen's commitment providing additional momentum to conclude the agreement within the current timeframe.

Key Outstanding Issues

Several critical areas remain under active negotiation between India and the EU. Government sources indicate that discussions are ongoing on multiple fronts including the Carbon Border Adjustment Mechanism, Geographical Indications, critical minerals, intellectual property rights, and various trade and regulatory matters.

Both sides have exchanged comprehensive lists of GI-tagged products for potential inclusion in the agreement. India defines GI-tagged goods as products originating from a specific location and having distinct nature, quality and characteristics linked to that location. Separate negotiations are simultaneously underway for both the FTA and an investment protection pact.

Sector-Specific Negotiations

The EU is seeking unrestricted export access for critical minerals from India, including elimination of export duties. This approach mirrors the bloc's earlier challenge to Indonesia's nickel export ban at the World Trade Organization. India, meanwhile, is expected to seek carve-outs or exemptions for stainless-steel exports to the EU in response to higher duties imposed by the bloc.

The Ministry of Commerce and Industry has conducted consultations with stakeholders from the automobile and steel sectors to address these concerns. The EU has proposed expanding the Carbon Border Adjustment Mechanism to cover 180 downstream products, with CBAM certificates scheduled for sale from February 1, 2027, for goods imported in 2026.

Trade Partnership Significance

The bilateral trade relationship represents a substantial economic partnership:

India aims to expand exports of labour-intensive goods through greater market access, while the EU seeks improved access for automobiles and liquor in the Indian market.

Recent Diplomatic Engagement

Commerce and Industry Minister Piyush Goyal held strategic discussions with EU Commissioner for Trade and Economic Security Maroš Šefčovič in New Delhi on December 8 and 9, 2025. These high-level talks provided strategic guidance to negotiating teams as they work toward concluding the agreement at the earliest possible date.

The negotiations have covered essential chapters including market access for goods, rules of origin, services, technical barriers to trade, and trade and sustainable development. The Commerce Ministry has clarified that sensitive agricultural issues on both sides are already off the table, removing a potential major obstacle to agreement conclusion.

Indian and European Union negotiation teams are maintaining constant engagement to address remaining contentious issues in their proposed free trade agreement ahead of the India-EU Summit scheduled for January 27 in New Delhi. The high-level diplomatic activity comes as the top EU leadership prepares to attend India's Republic Day parade as chief guest on January 26.

Recent High-Level Engagements

Commerce and Industry Minister Piyush Goyal recently concluded a two-day meeting with EU Commissioner for Trade and Economic Security Maros Sefcovic in Brussels to review negotiation progress. The discussions focused on resolving key disputes that have emerged during the 16 rounds of negotiations held so far.

Commerce Secretary Rajesh Agrawal is scheduled to meet his EU counterpart, Director General for Trade of the European Commission Sabine Weyand, in Brussels on January 6-7 to continue these critical discussions.

Key Contentious Issues

The remaining disputes center on several critical areas that reflect the different economic priorities of both regions:

India is advocating for zero-duty access for its labor-intensive sectors, particularly textiles and leather industries. Conversely, the EU is seeking significant duty reductions in automobiles, medical devices, wine, spirits, meat, and poultry, along with establishing a robust intellectual property regime.

Trade Relationship Overview

The bilateral trade relationship between India and the EU demonstrates substantial economic significance:

This makes the EU India's largest trading partner for goods, highlighting the strategic importance of concluding the FTA negotiations successfully.

Negotiation Framework

The comprehensive trade discussions resumed in June 2022 after a nine-year suspension that began in 2013 due to disagreements over market opening levels. The current negotiations encompass three major agreements:

• Comprehensive Free Trade Agreement
• Investment Protection Agreement
• Geographical Indications Pact

The talks cover 23 policy areas including trade in goods and services, investment, trade remedies, rules of origin, customs and trade facilitation, competition, government procurement, dispute settlement, intellectual property rights, geographical indications, and sustainable development.

Both sides are demonstrating commitment to concluding the negotiations at the earliest opportunity, with officials emphasizing the importance of continuous engagement to bridge remaining differences and establish a mutually beneficial trade framework.