India and the European Union (EU) have resolved to conclude a free trade agreement (FTA) by the end of this year. As negotiations progress, key elements of New Delhi’s trade relationship with Brussels are under discussion.

Trade Figures

The EU is India’s second-largest trading partner. Over the past few years, India's export and import trends with the EU have fluctuated significantly:

• FY21: Exports stood at $41.3 billion, while imports were $39.7 billion.
• FY22: Exports rose to $64.9 billion, and imports reached $51.4 billion.
• FY23: Exports surged to $74.8 billion, with imports at $61 billion.
• FY24: Exports slightly increased to $75.9 billion, while imports dipped to $61.4 billion.
• FY25 (April-Nov): Exports have recorded $50.6 billion so far, with imports at $38 billion.

India’s Top Exports to the EU

India’s Top Imports from the EU

Key Goals of the FTA

• Conclude FTA talks by the end of the year.
• Investment protection agreement and geographical indications pact also in progress.
• Digital public infrastructure to enhance interoperability.
• Mutual recognition of e-signatures to facilitate cross-border digital trade.

WTO Dispute

The EU has challenged India's import duty on some ICT products, while India is resisting the EU’s domestic enforcement regulation pressure. A 2019 dispute arose over India’s 7.5% duty on specific imports.

What the EU Wants

• Lower import duties on cars, alcoholic beverages.
• Share in India’s government procurement.

India’s Key Demands

• Recognition as a data-secure country.
• Easier work access for its skilled professionals in the EU.
• More market access for textiles, chemicals.
• Lower tariffs on its textiles, leather, and product exports.

Trade Irritants

• EU’s green measures such as CBAM, Deforestation Regulation pose compliance challenges for India.
• India’s quality control orders impact EU exports.
• EU’s traceability norms for textiles, EV batteries are also points of contention.