NEW DELHI: In the backdrop of Donald Trump’s threat of imposing reciprocal tariffs, India and the European Union today announced that a free trade agreement (FTA) between the two sides would be finalised by the end of this year.
Both sides committed themselves to taking “concrete steps” to complete the India-Middle East-Europe Economic Corridor (IMEC).
The moves were part of a blueprint for collaboration in the areas of trade, technology, investment, innovation, green growth, security, skilling and mobility announced after Prime Minister Narendra Modi and European Commission President Ursula von der Leyen met in New Delhi.
In a statement after the talks, Modi said, “We have directed our teams to conclude a mutually beneficial bilateral free trade agreement by the end of this year.”
Leyen said, “The global context calls for us to conclude our free trade agreement…You can count on my full commitment.”
A statement issued by the two sides mentioned the FTA and said officials had been directed to “work as trusted partners to enhance market access and remove trade barriers”.
Modi and Leyen were equally emphatic about the IMEC. Modi said, “Concrete steps will be taken to take it forward. The IMEC shall serve as an engine that drives global commerce, sustainable growth and prosperity in the days to come.”
The visiting leader signalled Europe’s eastward push saying, “We have a historic opportunity to bring the IMEC to life. It will connect us like never before. Investing in each other is in our core economic and national interests. Let’s make it happen.”
The IMEC was announced during the G20 summit in New Delhi in September 2023. It involves multiple countries, including India, the US, Saudi Arabia, the UAE and several European nations. The corridor aims at creating a comprehensive transportation network, comprising rail, road and sea routes, connecting India, West Asia and Europe.
After the meeting, Tanmaya Lal, Secretary (West) in the Ministry of External Affairs, told mediapersons that “both sides made a clear political commitment to ink the FTA quickly”.
Intensive negotiations were on, said Lal when asked if Europe would press for a reduction in the duties on wine, cheese and cars as a prerequisite.
Leyen was accompanied by the College of EU Commissioners — 22 of them — to India. The two sides held almost 20 ministerial-level meetings pertaining to different sectors yesterday and today. “It signals the high priority we share,” said Lal.
MEA spokesperson Randhir Jaiswal posted on X, “India-EU set an ambitious agenda for 2025 and beyond.”
India and the EU are increasingly cooperating on issues related to defence and outer space. The two sides agreed to have “focused discussions” on the defence industry, besides engaging on maritime domain awareness to promote shared assessment, coordination and interoperability.
The EU will post an officer at the Indian Navy’s Information Fusion Centre-Indian Ocean Region (IFC-IOR) that monitors sea traffic.
The EU’s eastward push was further visible as it will join the “Indo-Pacific Oceans Initiative”.
In an obvious reference to China, the two leaders reaffirmed their commitment to promoting a free, open, peaceful and prosperous Indo-Pacific built on international law and mutual respect for sovereignty and peaceful resolution of disputes.
The second ministerial meeting of the India-EU Trade and Technology Council was held last night. The council has been tasked with further deepening its engagement to shape outcome-oriented cooperation in areas of economic security and supply chain resilience, strengthening of semiconductor ecosystems, trustworthy and sustainable artificial intelligence, high-performance computing, 6G and digital public infrastructure.
India and the EU will engage in negotiations for a Security of Information Agreement (SoIA).