EU-India Free Trade Negotiations: Convergences and Divergences

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The World This Week

EU-India Free Trade Negotiations: Convergences and Divergences

The World This Week #327 Vol 7, No 36 21 Sep 2025

GP Team
21 September 2025

The World This Week #328 Vol 7, No 37 28 Sep 2025

Padmashree Anandhan

EU-India Free Trade Negotiations: Convergences and Divergences
Padmashree Anandhan

What happened?
On 17 September, the EU proposed a new strategy to improve bilateral relations with India. European Commission President Ursula Von Der Leyen announced the initiative “New Strategic EU-India Agenda.” She said: “With our new EU–India strategy, we are taking our relationship to the next level. Advancing trade, investment and talent mobility. Strengthening our joint economic security…Europe is open for business. And we are ready to invest in our shared future with India.”

In response, India’s Commerce Minister Piyush Goyal said: "India and the EU complement each other and offer great opportunities on both sides."

Anil Wadhwa, a former Indian diplomat said: “Resolving market access, agricultural tariffs and CBAM is pivotal for unlocking greater trade volume, safeguarding Indian industry, and ensuring EU climate goals do not penalize Indian exporters unfairly.”

The strategy includes five key areas of shared interest. Starting from emerging technologies, clean transition, security and defence, regional connectivity (multilateral cooperation) and mobility cooperation.

What is the background?
First, a brief note on geopolitics. The EU-India Free Trade Agreement (FTA) negotiations, which began in 2007 and were relaunched in 2021, is witnessing a turning point with emerging geopolitical developments. This is leaning more towards the EU as the transatlantic relations become conditional and aim to de-risk from China. India offers a large market, aligning with its democratic values and a secure partner for resilient supply chains. While the EU aids in critical investment, exports and technology transfer, which could help India reach its USD 10 trillion economy target. The negotiations, which were stalled once due to difficulty in reaching a consensus among the political leaders, no longer stand as a barrier. Both are at convergence to counter rising China’s influence and increase economic presence internationally.

Second, the complex road to the EU-India FTA. The trade relations and negotiation process have seen multiple phases for the EU and India. However, it slowly evolved from 1960s when the economic cooperations began. In 1994, the EU-India Cooperation Agreement was established and advanced to a “Strategic partnership” in 2004. During this period, trade in goods expanded from EUR 13.7 billion to EUR 30 billion by 2007. This served as the base to start negotiations for an FTA. In 2013, due to differences over tariffs, services, regulatory standards, agriculture, intellectual property, and mobility, the discussion was stalled till 2021. The talks were relaunched again in 2022 along with negotiations for investment protection and geographical indications. In the past years, the talks have been fast-tracked with increased negotiation rounds and discussion over transparency, regulatory cooperation, customs and trade facilitation. At the same time, the trade in service have also grown from EUR 30 billion in 2020s to EUR 60 billion by 2023.

Third, significance of the FTA. Conclusion of FTA would showcase how a balanced trade partnership can be executed when the global trade is turning to be more fragmented. It shows possibility of strengthening economic partnerships beyond US and China. For the EU, India would be an alternate for production to reduce its dependence on China. While for India, gaining access to EU’s single market would boost its exports and improve the industrial value. The deal would also help in sustainable development, carbon regulation (CBAM) and digital trade.

Fourth, areas of divergence. The major difference between the EU and India in FTA negotiations is on market access, regulatory standards and services. The EU calls for reduced tariffs on industrial, automobile, wine, and dairy products, combined with strong intellectual property protection and environmental standards. However, India remains cautious on opening up its agricultural, dairy, and domestic manufacturing sectors. India’s concerns are that the deal could undermine the “Make in India” initiative or restrict its ability to regulate digital trade and mobility of personnel. India also seems to seek higher flexibility in the movement of IT and business professionals. While the EU demands commitments on “labour mobility and regulatory equivalence.”

What does it mean?
Winners and losers at the industrial level. The FTA’s pros and cons at the sector level can be found by analysing the competition and tariff factors. For India, textile, apparel, leather, footwear, IT and business sectors are expected to benefit from the market and mobility opportunities of the EU. Whereas automobiles, dairy and agriculture would face increased competition and be affected by reduced tariffs. For the EU, it is expected to be the inverse scenario. However, some frictions could be seen in digital trade and trade regulation.

TWTW Regional Roundups

News from around the world
Padmashree Anandhan, Rizwana Banu S, M Santhiya, Merin Treesa Alex, Rohini Reenum, Femy Francis, and Anu Maria Joseph.

CHINA THIS WEEK
China: Pakistan’s president visits China’s Advanced Aircraft Complex
On 14 September, Pakistan’s President Asif Ali Zardari pledged to further Pakistan’s cooperation with China in the defense sector. The statement was made during his visit to the Aviation Industry Corporation of China’s (AVIC) Advanced Aircraft Complex in Chengdu. Zardari noted that China is a trusted partner and is a key contributor to Pakistan’s security and technology advancement. Zardari’s office said: “He reaffirmed that the two countries would continue to expand collaboration in defense production and aviation, further deepening their all-weather strategic cooperative partnership.” In the past five years, China has supplied 81 per cent of Pakistan’s imported weapons, notes SIPRI. Zardari’s office also issued that “The President noted that the J-10 and JF-17 have greatly strengthened the Pakistan Air Force, a fact clearly demonstrated during May 2025’s Ma‘raka-e-Haq and Operation Bunyan-um-Marsoos [against India in May.”

China: Delivers the largest floating LNG facility, “NGUYA FLNG”, reports Global Times
On 14 September, Global Times reported on China’s largest domestically built floating LNG facility, “NGUYA FLNG”. It was unveiled and delivered to Nantong, East China's Jiangsu Province, and escorted by the Nantong Maritime Safety Administration. Global Times noted, “The facility measures 376 meters in length, 60 meters in breadth and 35 meters in depth, with the biggest tonnage and gas storage capacity of its kind. It has an LNG storage capacity of 180,000 cubic meters and a liquefied petroleum gas (LPG) storage capacity of 45,000 cubic meters, with an annual LNG production capacity of 2.4 million tons.” It will be deployed in the waters of the Republic of Congo in Africa.

China: US agree on a framework deal on TikTok, reports BBC
On 16 September, the BBC reported that the US Treasury informed that they have reached a framework deal with China over the divestment call on TikTok. The US Treasury Secretary Scott Bessent detailed the meeting with the Chinese delegation held in Madrid, Spain. He also informed that the US President Donald Trump will talk to the Chinese President Xi Jinping and finalize the deal. Trump also posted on Truth Social, where he noted the talks went well, and China also affirmed that they have reached a framework agreement but noted that no deal will be made at the expense of Chinese companies. The meetings come in light of the coming deadline with the Chinese owners of TikTok. The deal is aimed at ending the trade war, notes Bessent, and the deal has agreed upon commercial terms that would protect US national security interests.

China: Holds its 12th Beijing Xiangshan Forum
On 17 September, China held the 12th Beijing Xiangshan Forum under the theme “Upholding International Order and Promoting Peaceful Development.” This year’s forum has participants from 100 countries. The forum was first launched in 2006 by the China Association for Military Science. China’s Minister of Defense Dong Jun addressed the gathering as he pledged to further the efforts to safeguard world peace. He said: “The Chinese military is willing to work with all parties to uphold security with concrete actions, enhance military mutual trust, step up multilateral coordination, and promote high-quality and efficient cooperation while improving related mechanisms, to make greater contributions to safeguarding world peace and building a community with a shared future for humanity.”

SOUTH ASIA
Pakistan: Signs defence agreement with Saudi Arabia
On 17 September, Pakistan and Saudi Arabia signed a “Strategic Mutual Defence Agreement” aimed at strengthening each other's defence and enhancing security. In response, on 20 September, Indian Ministry of External Affairs official spokesperson Randhir Jaiswal stated that New Delhi would expect Saudi Arabia to keep in mind India's interests and sensitivities as the latter had signed an agreement with Pakistan. Saudi Arabia was one of the top exporters of petroleum to India, and the two countries agreed to boost cooperation in supplies of crude and liquefied petroleum gas and explore joint projects in refineries and petrochemicals.

India: Trade talks with the US “positive and forward-looking,” says Commerce Ministry
On 16 September, US President Trump and India's Prime Minister discussed bilateral trade ties during an over call. Additionally, the US trade representative for South and Central Asia's assistant met with Chief Negotiator Rajesh Agrawal in New Delhi. India's Commerce ministry said, “It was decided to intensify efforts to achieve early conclusion of a mutually beneficial Trade Agreement.” Amidst punitive tariffs, Reuters reported that both sides are now expected to hold the sixth round of trade negotiations, signaling a thaw in US-India tensions.

MIDDLE EAST THIS WEEK
Qatar: Arab-Islamic emergency summit held
On 15 September, around 60 countries, which are either members of the Arab League or the Organization of Islamic Cooperation (OIC), gathered in Doha for an emergency summit to mull a response to Israel’s earlier bombing of the Qatari capital. The leaders expressed their solidarity with Qatar and denounced the attack as “cowardly.” In his opening statement, Qatari Emir Sheikh Tamim bin Hamad Al Thani termed the bombing as “blatant, treacherous, and cowardly” and accused Israel of not having any “genuine interest in peace” and “thwarting negotiations.” and Further, members of the Gulf Cooperation Council (GCC)’s vowed to “activate a joint defence mechanism” the details of which remain unclear. The GCC also revealed that talks are ongoing to develop “Gulf deterrent capabilities.”

Iran: US levels fresh sanctions against Iranian nationals and companies
On 16 September, Al Jazeera reported that the US has leveled fresh sanctions against individuals and entities who are involved in “illicit fund transfers” that support Iran’s military activities. The report has been confirmed by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC). Among those sanctioned are Iranian nationals and companies based in Hong Kong and the United Arab Emirates. The Department also revealed that these fund transfers, often through “shadow banking networks,” circumvent the sanctions and are done to the advantage of the Islamic Revolutionary Guard Corps (IRGC) and the Iranian Ministry of Defence. The latest sanctions are a part of US President Donald Trump’s larger stated goal of reducing Iran’s oil exports “to zero.”

Syria: Along with Jordan and the US, presents new plan for security in Suwayda
On 16 September, Syrian Foreign Minister Asaad al-Shibani announced a new plan for restoring security in the province of Suwayda after a meeting with his Jordanian counterpart Ayman Safadi and US Syria’s envoy Tom Barrack in Damascus. This new plan includes facilitating the return of those displaced (around 160,000) by the sectarian violence that had broken out in the province on 13 July between the Druze community and the Beduoin tribes. The plan also proposes an internal reconciliation process. Safadi added that “We want Syria to stabilize, recover and rebuild after years of destruction and suffering, and to start practical steps toward a brighter future for all Syrians.” It is to be noted that Suwayda shares a border with Jordan and over a period, the latter has had to tackle drug and weapons smuggling at the border.

AFRICA THIS WEEK
Malawi: Awaits election results amid deepening economic crisis
On 17 September, Malawi began counting votes after concluding its presidential election held on 16 September. Seventeen candidates ran, with incumbent President Lazarus Chakwera and former leader Peter Mutharika as main contesters. Both face corruption allegations. Voter turnout dropped to 51 per cent from 64 per cent in 2020. Inflation, increasing cost of living, and climate-related issues topped the campaigns. The economy, reliant on agriculture, has been hit by droughts and Cyclone Freddy.

Mali: France suspends counterterrorism cooperation amidst diplomatic tussle
On 19 September, Al Jazeera quoted the French Ministry for Europe and Foreign Affairs that France has suspended counterterrorism cooperation with Mali. The ministry has asked two staff members of the Malian consulate to leave. The announcement came after a French national, Tann Vwzilier, was arrested in Mali, allegedly for plotting a coup in August. Mali's Minister of Security, General Daoud Aly Mohammedine, claimed that Veilier acted “on behalf of the French intelligence service, which mobilized political leaders, civil society actors, and military personnel.” Paris responded by describing the move as “unfounded.”

EUROPE THIS WEEK
The UK: Trump and Starmer portray a stable equation
On 18 September, the BBC reported on US President Donald Trump's visit to the UK. His visit included meeting the King and UK Prime Minister Keir Starmer. According to the report, the joint conference between Trump and Starmer showed no sign of a major shift on issues relating to Palestinian statehood or the firing of Peter Mandelson as UK ambassador to the US. Starmer was observed to pursue careful diplomacy to ensure the UK’s relations with the US were on solid ground without confrontations. The overall visit was observed to be focused on maintaining a stable relationship.

Europe: Cyberattack disrupts major European Airports, causes flight delays
On 20 September, a cyberattack targeting a service provider for check-in and boarding systems disrupted operations at major European airports, including London's Heathrow, Brussels, and Berlin, causing flight delays and cancellations. Brussels Airport reported that the attack rendered its automated systems inoperable, forcing manual check-in and boarding procedures, which significantly impacted flight schedules. The airport stated that the service provider is actively working to resolve the issue quickly. Heathrow Airport attributed the delays to a "technical issue" at a third-party supplier. Berlin Airport noted longer check-in wait times due to an issue affecting the system provider, which also impacted multiple European airports.

OCEANS/MARITIME THIS WEEK
Oceans: High Seas Treaty to enter into force in January 2026 following ratification
On 19 September, the BBC reported that the High Seas Treaty had reached the threshold for ratification and will enter into force in January 2026. This comes after Morocco became the 60th country to ratify the treaty. The negotiations for the agreement lasted for two decades, and the adoption will enable the establishment of marine protected areas (MPAs) in international waters. The treaty sets rules to preserve and use marine biodiversity sustainably. It will address the threats from climate change, overfishing, and pollution. According to the International Union for Conservation of Nature (IUCN), close to 10 per cent of marine species are under threat of extinction, and the treaty aims to protect 30 per cent of the high seas by 2030. At present, only one per cent of the high seas are protected, leaving the rest vulnerable. Previously, the UK introduced the bill for ratification, and several environmental groups, such as WWF and Greenpeace, praised the treaty as a breakthrough for ocean conservation. Following this, countries will now propose areas for protection, which will be voted on by treaty signatories. However, critics have raised concerns over the country’s decision on protected areas, as their own environmental impact assessments (EIAs) could be biased.

About the Authors
Femy Francis, Anu Maria Joseph, and Padmashree Anandhan are Project Associates at NIAS. Rohini Reenum is a Doctoral Student at NIAS. Rizwana Banu S is an undergraduate student at the Department of Political Science, Madras Christian College. Merin Treesa Alex is a postgraduate student at the Department of International Studies, Stella Maris College, Chennai. M Santhiya is from the Department of Political Science, Madras Christian College, Chennai.

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The World This Week

EU-India Free Trade Negotiations: Convergences and Divergences

The World This Week #327 Vol 7, No 36 21 Sep 2025

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