India-EU Trade Deal Advances Rapidly: Goyal Flags 10 Chapters Closed as Alternative to US Tariff Pressures

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Commerce and Industry Minister Piyush Goyal announced substantial headway in India-EU Free Trade Agreement (FTA) talks following his three-day visit to Brussels from October 26-28, 2025, stating that 10 out of 20 chapters have been finalized and 4-5 more broadly agreed upon. This comes amid a 12% dip in India's September 2025 exports to the US due to steep tariffs imposed by President Donald Trump, underscoring the urgency to secure stable markets like the EU, where India's merchandise exports reached $82 billion in FY25—nearly matching the $86.5 billion to the US. Both sides reaffirmed a commitment to conclude the deal by year-end 2025, aligning with directives from PM Narendra Modi and EU Commission President Ursula von der Leyen.

Key Points

1. During the Brussels visit, India and EU negotiators closed 10 of the 20 FTA chapters, with another 4-5 chapters reaching broad consensus, focusing on non-sensitive industrial tariffs and labor-intensive sectors.
2. Sensitive issues like steel, automobiles, the EU's Carbon Border Adjustment Mechanism (CBAM), and other regulations remain open for further talks, requiring mutual recognition of sensitivities.
3. The EU technical team, led by the Director-General for Trade, will visit India next week to build on identified solutions and aim for constructive outcomes.
4. EU Trade Commissioner Maros Sefcovic is slated to visit India in late November or December 2025 to accelerate closure, emphasizing fair, equitable, and balanced terms promoting trade, investment, technology, and mobility.
5. India's FY25 merchandise exports to the EU stood at $82 billion, providing a stable alternative amid a 12% US export decline in September 2025, offset by 6% overall growth via higher shipments to UAE and China.
6. The talks align with a February 2025 directive from Modi and von der Leyen during the EU College of Commissioners' New Delhi visit, targeting FTA conclusion by end-2025.
7. Goyal stressed prioritizing quality over deadlines, with similar progress in New Zealand FTA talks ahead of his upcoming visit there.
8. Discussions addressed India's concerns over EU non-tariff measures and new regulations, seeking preferential treatment for key exports.
9. The FTA is expected to deepen economic ties, opening avenues for Indian goods in the EU's 450-million consumer market while addressing mutual strengths.
10. This progress occurs against the backdrop of US-China trade dynamics, with Trump-Xi meeting on October 31, 2025, potentially influencing global tariff landscapes.

Explained

What Is the India-EU Free Trade Agreement and Its Basic Objectives?

Foundational Purpose of FTAs: A Free Trade Agreement (FTA) is a pact between two or more nations to reduce or eliminate tariffs, quotas, and trade barriers on goods and services, fostering easier market access and economic growth; for India, FTAs like this one aim to boost exports, attract investments, and diversify from volatile partners like the US, where tariffs can disrupt supply chains—similar to how India's ASEAN FTA since 2010 has grown bilateral trade to $130 billion annually.

Historical Context of India-EU Ties: Negotiations relaunched in 2022 after a 2007-2013 stalemate over agriculture and dairy sensitivities; the EU, India's third-largest trading partner with $120 billion bilateral trade in 2024, represents a rules-based bloc of 27 nations emphasizing sustainability via tools like CBAM, which taxes carbon-intensive imports starting 2026 to align with green goals.

Core Objectives for India: The deal seeks zero-duty access for 90% of tariff lines, covering sectors like textiles, gems, and IT services, while protecting domestic industries; it also includes investment protection and easier visa mobility for professionals, addressing India's $100 billion services export potential to the EU.

What Recent Developments Mark Progress in the Negotiations?

Key Outcomes from Goyal's Brussels Visit: On October 26-28, 2025, Goyal engaged with EU Trade Commissioner Maros Sefcovic and officials, finalizing 10 chapters on rules of origin, customs, and services, while broadly deciding 4-5 more on intellectual property and e-commerce; this halves the agenda, per Ministry statements, with convergence on non-sensitive tariffs for quick wins.

Upcoming Milestones and Timeline: An EU team arrives next week for the 15th round, building on virtual sessions; Sefcovic's India visit in November-December targets closure, reaffirming the end-2025 goal set in February 2025 Modi-von der Leyen talks, which emphasized mutual sensitivities amid global shifts like US tariffs.

Broader Negotiation Dynamics: Intensive sessions explored "landing zones" on disputes, with India pushing for exemptions in labor sectors; no infographics in reports, but data highlights EU's $82 billion import from India in FY25, up 5% YoY, signaling untapped potential in pharmaceuticals and renewables.

What Are the Main Challenges and Sensitive Sectors in the Talks?

Persistent Hurdles on Tariffs and Regulations: Steel and automobiles face EU demands for liberalization, while India's concerns center on flooding from cheap imports; CBAM, effective 2026, could add 20-35% costs to Indian steel exports ($8 billion annually), prompting calls for transition aids, as analyzed in Economic Times reports.

Non-Tariff Barriers and Sustainability Demands: EU rules on data privacy (GDPR) and environmental standards challenge Indian SMEs; The Hindu notes agriculture/dairy remain off-limits for India, with EU seeking concessions on wines/spirits, balancing $38 billion trade deficit favoring EU.

Geopolitical Influences: Trump's 25% tariffs on steel/aluminum since October 2025 have slashed US-bound Indian exports by 12% in September, per Mint data; this accelerates EU pivot, but requires navigating US-China deal risks from the October 31 Trump-Xi summit.

How Will the FTA Impact India's Economy and Global Trade Strategy?

Economic Boost for Exports and Jobs: Closure could add $30-40 billion to annual exports by 2030, per FICCI estimates, creating 2 million jobs in textiles/leather; it diversifies from US reliance (15% of exports), stabilizing amid 7% GDP growth targets.

Strategic Diversification and 'Make in India': Enhances supply chain resilience, attracting EU FDI ($100 billion since 2000) in EVs and green tech; aligns with Atmanirbhar Bharat by easing tech transfers, as Goyal noted in Hindustan Times interviews.

Long-Term Global Positioning: Positions India in EU's Indo-Pacific strategy, countering China; Financial Express highlights potential for services chapter to double IT-BPM remittances ($50 billion to EU), fostering balanced ties without deadlines overriding equity.

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