By Jordnrukare India Trade Desk | June 17, 2025 | Limassol / New Delhi / Brussels
India and the European Union are accelerating negotiations for a comprehensive Free Trade Agreement (FTA), aiming for finalisation by the end of 2025, Prime Minister Narendra Modi said during his address at the India-Cyprus CEO Forum in Limassol on Monday.
With geopolitical realignments and trade bloc consolidations, both India and the EU have intensified efforts to conclude a comprehensive trade deal encompassing goods, services, investment protection, and geographical indications (GIs).
🔄 FTA Talks Intensify: 11 Rounds Completed, Next in July
India and the EU resumed formal free trade agreement (FTA) negotiations in June 2022, following an eight-year hiatus. Since then, 11 negotiation rounds have been held, with the 12th scheduled for July 7 in Brussels, according to L. Satya Srinivas, Additional Secretary in India’s Department of Commerce.
“Momentum has picked up and meetings are now held more frequently,” said Srinivas, underlining that 5 of the 23 chapters in the FTA have already been concluded.
🎯 India’s Core Demands: Tariff-Free Access and Services Liberalisation
India is seeking:
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Zero tariffs on key labour-intensive exports such as textiles, leather, and engineering goods.
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Eased access to the EU services market, especially in IT, healthcare, and professional services.
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Investment protections and legal clarity for Indian businesses expanding into the EU.
🧀 EU Pushes for Dairy Market Access—India Holds Firm
A significant point of contention remains dairy.
The EU has requested lower import duties on products such as cheese and skimmed milk powder (SMP). Currently, India imposes high tariffs to protect its 80-million-farmer-strong dairy sector.
Indian negotiators, however, have categorically ruled out any tariff concessions in the dairy segment—a red line India has held consistently, including in its recently concluded FTA with the UK.
“We are not inclined to provide market access for sensitive dairy products in any FTA,” said a senior Indian trade official familiar with the negotiations.
🍷 Wines, Automobiles, and Concessions Elsewhere
Other EU priorities include:
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Lowering wine import tariffs from the current 150% to around 30–40%. India may consider replicating the model agreed with Australia under the ECTA, which phases down tariffs to 50% over a decade.
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Reducing duties on completely built-up (CBU) vehicles from the current 70% to 10–20%. The EU currently exports over $2 billion worth of automobiles and auto parts to India, primarily in completely knocked-down (CKD) kits, which are taxed at 15%.
🇬🇧 UK FTA Ready for Signature; EU May Follow
India recently completed negotiations on a “separate F “A with the UK. Legal “scrubbing” and documentation are currently underway, and the agreement is expected to be signed within three months.
Observers suggest that the successful closure of the UK deal may add pressure—and set a precedent—for faster progress with the EU pact.
🧠Looking Ahead: High Stakes, Limited Time
While both sides are optimistic, the dairy deadlock could pose a significant challenge. As India heads into national elections in 2026 and the EU faces internal economic strains, the window for a politically viable compromise may be narrow.
Still, trade experts view this as a defining moment for India to deepen economic ties with a $17 trillion economic bloc.
🔍 Key Issues iIndia’sndia-EU FTA
| Issue | EU Ask | India’s Position |
|---|---|---|
| Dairy (cheese, SMP) | Major tariff cuts | Strong resistance; dairy excluded |
| Wines | Tariffs cut to 30–40% | Possible phased reductions (like ECTA) |
| CBU Automobiles | Import duties down to 10–20% | Under consideration; auto industry wary |
| Services & IT | Limited access | India demands expanded EU market access |
| Labour-Intensive Exports | Preferential market access | Key Indian demand |
Source: India–EU FTA Advances, But Dairy Access Remains a Key Sticking Point – Jordbrukare
