EU and India Push for Free Trade Deal, but Challenges Remain – BBC Reports
According to BBC, European Commission chief Ursula von der Leyen is in Delhi, where she met Indian Prime Minister Narendra Modi on Friday. She said that the European Union (EU) and India are working hard to sign a free trade deal this year, but it won’t be easy.
“I know this will be difficult, but timing and determination matter,” von der Leyen said in Delhi. BBC explains that if this deal happens, it would be the biggest trade agreement of its kind in the world.
The BBC reports that von der Leyen is in India with the entire College of Commissioners, marking the first official visit after the European Parliament elections in June 2024. This shows how important the relationship between India and the EU has become.
While in Delhi, BBC notes that von der Leyen spoke about increasing cooperation in semiconductors, artificial intelligence (AI), and cleantech. Both India and the EU want to improve trade and investment in these areas.
The BBC highlights that discussions for an India-EU free trade agreement started again in 2021, and a new round of talks is expected in March. There is also an India-EU Summit planned for later this year, showing continued efforts to strengthen ties.
Security is another big topic, according to BBC. Von der Leyen said that India and the EU are looking at a Security and Defence Partnership, similar to what the EU already has with Japan and South Korea.
The BBC explains that this push for stronger ties comes as Europe faces trade tensions with the U.S.. Since Donald Trump returned to the White House, he has announced plans to impose 25% tariffs on European goods, saying the EU was created to “screw the U.S.” The EU has promised to respond “firmly and immediately” to these new tariffs.
Because of this tension with Trump, the BBC reports that the EU is now more focused than ever on building strong trade and security ties with India.
Despite these efforts, a trade deal between India and the EU has been difficult to finalize, says the BBC. Major disagreements remain, especially in agriculture and manufacturing. A think tank called Observer Research Foundation (ORF) noted that while talks have been happening, “there is little progress so far.”
However, BBC points out that the EU is already India’s biggest trading partner, with 6,000 European companies operating in India. Trade between the EU and India reached $135 billion in 2022-23, nearly doubling in the last decade.
After years of being cautious about free trade deals, BBC reports that India is now actively signing agreements with multiple countries. Just this week, India restarted trade talks with the UK, nearly a year after negotiations were paused due to upcoming elections.
Last year, India also signed a $100 billion free trade deal with the European Free Trade Association (EFTA)—a group of four European countries that are not part of the EU—after 16 years of negotiations, according to BBC.
With all these trade agreements happening, BBC suggests that a deal between India and the EU might still be possible, but major challenges remain.
Credit: BBC
https://www.bbc.com/news/articles/c0eggy1104po