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This Week in AsiaEconomics

India, EU ramp up push for ‘historic’ free-trade deal amid US tariff tensions

A trade pact with the EU would offer an ‘alternative market’ for Indian goods amid a fraught global environment, analysts say

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European Commission President Ursula von der Leyen and India’s Prime Minister Narendra Modi during a meeting in New Delhi, India, in February 2025. Photo: Reuters
Biman Mukherji
India and the European Union are stepping up a long-delayed push for a free-trade agreement as New Delhi prepares to host the bloc’s top leaders later this month, with both sides signalling urgency amid mounting pressure from US tariffs and a shifting global order.

European Commission President Ursula von der Leyen, in a speech at the World Economic Forum on Tuesday, said she would be travelling to India after the conference, adding that the two sides were “on the cusp of a historic trade agreement” that could be “the mother of all deals”.

Both von der Leyen and European Council President Antonio Costa will attend India’s Republic Day celebrations on January 26, followed by an EU-India summit the next day where they will hold talks with Indian Prime Minister Narendra Modi, Foreign Minister Subrahmanyam Jaishankar and other top officials.
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“The political signalling from both sides has been unusually strong, with leaders openly calling it ‘historic’ and timing the summit with Republic Day for maximum impact,” said Srinivaasan Balakrishnan, director of strategic engagements and partnerships at Delhi-based think tank Indic Researchers.

Geopolitical pressure from US trade uncertainty, as well as a realignment of EU supply chains, had created urgency on both sides, he added.

EU Council President Antonio Costa (left) and EU Commission President Ursula von der Leyen will attend India’s Republic Day celebrations on January 26. Photo: dpa
EU Council President Antonio Costa (left) and EU Commission President Ursula von der Leyen will attend India’s Republic Day celebrations on January 26. Photo: dpa

Negotiations between the two sides have dragged on since 2007 due to differences over issues such as market access and mobility of workers, but have acquired urgency in a fraught global environment.

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