India’s commerce secretary announces that negotiations on the India EU trade deal are nearing completion, with a potential signing during the upcoming summit in New Delhi.
India expects to conclude talks on the India EU trade deal this month. Commerce Secretary Rajesh Agrawal stated on 15 January 2026 that the two sides are very close to finalising the pact. This comes ahead of a high-level summit in New Delhi, where EU leaders will visit from 25 to 27 January. The agreement aims to boost trade amid global pressures.
The India EU trade deal holds significant implications for South Asia. It could enhance economic ties, providing Indian exporters better access to European markets. This pact may diversify trade options for the region, reducing reliance on traditional partners and fostering growth in sectors like textiles and pharmaceuticals.
Progress in India EU FTA Negotiations
Negotiations on the India EU FTA have advanced rapidly. Officials report that 20 out of 24 chapters have been finalised. Remaining issues include carbon tax and regulatory alignment. Agrawal noted during a press interaction on 15 January that teams are working to resolve these before the leaders’ meeting.
The EU India trade agreement seeks to lower tariffs on various goods. India plans to reduce duties on European wine and spirits, currently up to 150 percent. In return, the EU will ease access for Indian products in textiles, pharmaceuticals and engineering. Agriculture remains excluded to protect domestic farmers, who form about 44 percent of India’s workforce.
Recent diplomatic efforts have accelerated the process. Union Commerce Minister Piyush Goyal visited Brussels from 8 to 9 January 2026 for high-level talks with the EU Commissioner for Trade. The visit focused on expediting the India EU trade deal. Goyal emphasised deepening the trade relationship during the discussions.
Background on EU India Trade Agreement
Talks for the EU India trade agreement resumed in 2022 after a nine-year hiatus. Both sides aimed to address trade barriers and promote investment. Bilateral trade reached 120 billion euros in 2025, with potential for growth to over 200 billion euros by 2030 under the pact.
India’s exports to the EU include textiles, chemicals and machinery. The EU supplies automobiles, aircraft and chemicals to India. The India EU deal 2026 could add 100 billion euros in annual trade gains, according to estimates. This would benefit South Asian economies through supply chain integration.
Challenges have included differences on intellectual property and environmental standards. The EU’s carbon border adjustment mechanism poses a hurdle, potentially affecting Indian steel and aluminium exports. Negotiators have held multiple rounds, including a stocktake meeting in New Delhi on 5 November 2025.
The pact aligns with India’s strategy to secure free trade agreements. Recent deals with the UK and Australia have set precedents. For South Asia, the India EU trade deal could spur regional exports, as neighbouring countries like Pakistan and Bangladesh may gain from spillover effects in textiles.
Economic Impact of India EU Deal 2026
The India EU trade deal promises substantial benefits. It covers nearly 25 percent of the world’s population, creating one of the largest free trade zones. Indian apparel exports to the EU could rise by 12 to 12.5 percent, reaching 3 billion dollars by 2026.
Pharmaceuticals stand to gain from streamlined regulations. India, a major generic drug supplier, could see exports increase by 20 percent. The EU India trade agreement may also facilitate technology transfers in renewable energy and digital services.
For South Asia, the deal enhances geopolitical positioning. It counters protectionist trends elsewhere, such as US tariffs. India’s role as a bridge between Asia and Europe strengthens, potentially attracting more foreign investment to the region.
Data from the Ministry of Commerce shows India’s merchandise exports to the EU grew 15 percent in 2025. Services trade added another 30 billion euros. The India EU FTA could double these figures within five years.
Hurdles in Finalising India EU FTA
Despite progress, some obstacles remain. The carbon tax issue requires compromise to avoid trade disruptions. Officials indicate negotiations are ongoing virtually.
Sensitive sectors like automobiles and steel need balanced outcomes. India seeks safeguards against import surges, while the EU pushes for market access in services.
The timeline ties to the India-EU summit on 27 January 2026. EU Commission President Ursula von der Leyen and European Council President Antonio Costa will attend as chief guests for Republic Day on 26 January. The event provides a platform to announce the India EU deal 2026.
What’s Next
The India EU trade deal could be signed at the summit, marking a milestone in bilateral relations. Ratification may follow in national parliaments, with implementation targeted for late 2026. Monitoring committees will oversee compliance.
This agreement positions India as a key player in global trade. It underscores the momentum in the EU India trade agreement, promising sustained economic collaboration.
The India EU trade deal advances amid stalled US negotiations. Agrawal highlighted that while close, no deadline applies to the US pact. Focus remains on finalising the India EU FTA to secure new markets.
Published in SouthAsianDesk, January 16th, 2026
Follow SouthAsianDesk on X, Instagram and Facebook for insights on business and current affairs from across South Asia.
