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India and the European Union are holding potentially decisive trade negotiations in New Delhi this week, seeking to resolve differences over agriculture, dairy and non-tariff barriers to meet an ambitious end of year deadline for a deal, Indian government and EU sources said.
New Delhi is seeking to deepen global partnerships after US President Donald Trump doubled tariffs on Indian goods to 50 per cent last month over India’s Russian oil purchases, hitting exports such as textiles, leather and chemicals.
Negotiations, relaunched in 2022, have gained pace since Trump’s re-election. Brussels too, faced with Trump’s tariffs, has accelerated its push for trade alliances, sealing deals with Mexico and the South American Mercosur countries and stepping up talks with India, Indonesia and the UAE.
A pact with the EU could also draw India closer to the West, after unease over Prime Minister Narendra Modi’s recent visit to China for a summit attended by Russian President Vladimir Putin and other leaders.
“Talks with the EU are progressing well,” an Indian government source said, citing Modi’s call with European Commission President Ursula von der Leyen last week, when both leaders pledged to conclude a deal this year.
So far 11 of the 23 chapters under negotiations have been finalised, covering customs, digital trade, intellectual property, competition, subsidies, dispute settlement and anti-fraud measures, the source said.
But sticking points remain.
India has ruled out concessions on agriculture and dairy, citing farmers’ livelihoods, while the EU is pressing for greater access to India’s market for automobiles and alcoholic beverages.
Differences also persist on rules of origin, food safety standards, labour and environmental obligations, and what Brussels views as restrictive Indian quality control orders that act as non-tariff barriers, an EU official said.
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