Trade Talks Accelerate: EU and India Aim to Finalise Landmark Free Trade Agreement by Year-End

In a high-level diplomatic exchange that signals renewed urgency, European Commission President Ursula von der Leyen confirmed on September 17, 2025, that she and Indian Prime Minister Narendra Modi held a conversation focused on concluding the long-pending India-EU Free Trade Agreement (FTA) by the end of this year. The announcement coincided with the unveiling of the EU’s new strategic agenda for India, which aims to deepen cooperation across trade, technology, security, and global governance.

 

The FTA, under negotiation since 2007 and relaunched in 2022, has gained momentum amid shifting geopolitical dynamics and the need for diversified supply chains. Both leaders expressed a shared commitment to finalising the deal within the next three months, with the EU describing India as a reliable partner and a key player in the global economic order.

 

Key Highlights From The Diplomatic Exchange

 

- Ursula von der Leyen and Narendra Modi reaffirmed intent to conclude the India-EU FTA by December 2025  

- The conversation took place on Modi’s 75th birthday, adding symbolic weight to the announcement  

- The EU released a new strategic agenda to elevate bilateral ties across five pillars: prosperity, security, connectivity, mobility, and global engagement  

- Eleven chapters of the FTA negotiations have been completed, with market access and rules of origin still pending  

- The EU remains India’s largest trading partner, with bilateral goods trade reaching USD 135 billion in FY2023–24  

 

Strategic Agenda And Policy Alignment

 

The European Commission’s newly adopted Joint Communication outlines a comprehensive roadmap for EU-India relations. The document identifies shared interests in areas such as climate action, digital transformation, defence industrial cooperation, and multilateral reform. It also proposes initiatives in maritime security, cyber defence, and counterterrorism, reflecting the evolving nature of global threats.

 

The agenda is structured around five pillars:

 

- Prosperity and sustainability: Boosting trade, investment, and clean energy cooperation  

- Security and defence: Enhancing regional stability and industrial collaboration  

- Connectivity: Strengthening supply chains and infrastructure links  

- Mobility and people-to-people ties: Expanding educational exchanges and digital workforce mobility  

- Global engagement: Coordinating on UN reforms, WTO modernisation, and climate diplomacy  

 

Geopolitical Context And Challenges

 

While the EU is keen to deepen ties with India, concerns persist over New Delhi’s continued energy and defence engagement with Russia. EU foreign policy chief Kaja Kallas flagged India’s participation in Russian military exercises and its oil purchases as potential obstacles to closer cooperation. However, von der Leyen emphasized that the partnership is rooted in shared values and mutual interests, and should not be derailed by external pressures.

 

India has maintained a neutral stance on the Russia-Ukraine conflict, advocating for peaceful resolution while defending its sovereign right to pursue energy security. Modi reiterated this position during his birthday call with von der Leyen, stating that India remains committed to contributing constructively to global peace efforts.

 

Economic Significance And Forward Outlook

 

The India-EU FTA is expected to unlock massive opportunities for both sides, covering trade in goods and services, investment protection, digital commerce, and sustainable food systems. Swedish Ambassador Jan Thesleff recently described the potential agreement as the world’s largest, covering 1.9 billion people.

 

If concluded by December, the FTA would mark a historic milestone in global trade architecture, positioning India and the EU as co-architects of a more balanced and resilient economic order.

 

Sources: MSN India, Outlook India, News18, EU-India Trade Council