The European Union (EU) has been urging India to lower its high tariffs on cars and alcoholic beverages for a long time in order to boost trade. The European bloc made the same request during its trade negotiations with India on March 10-14, 2025 in Brussels. The EU made the call for lower tariffs after US President Donald John Trump threatened to impose reciprocal tariffs from early April (2025), causing anxiety for the Indian exporters.

During her visit to India on February 27-28, 2025, Ursula von der Leyen, the President of the European Commission (EC), outlined key areas for deeper bilateral cooperation under strategic partnership. During her talks with Indian Prime Minister Narendra Modi and Trade Minister Piyush Goyal, she also offered flexibility on agricultural issues in order to expedite Free Trade Agreement (FTA) talks.

The EC President stressed that the EU was eager to take its ties with India to new heights, saying that the proposed India-Middle East-Europe Economic Corridor (IMEC) would make it possible. von der Leyen expressed hope that the corridor would bring a major change to the global commercial map. As India seeks opportunities to increase exports to the EU member-countries on its own terms, the visiting EC official claimed that the EU would sign an FTA with the South Asian nation by the end of 2025 that would address all the outstanding issues. Meanwhile, she acknowledged the difficulties associated with finalising the trade deal, negotiations for which began in 2007, were suspended in 2013, and then revived in 2022. For his part, Prime Minister Modi said: “We have directed our teams to conclude a mutually beneficial bilateral Free Trade Agreement by the end of this year.”

A senior EU official who wished to remain anonymous stressed: “The Indian market is relatively closed, especially to key products of commercial interest to the EU and our member states’ industries, including cars, wines and spirits.” He told Reuters that the EU wanted to strengthen trade and security ties with India in order to reduce reliance on essential products from China. According to the official, the EU considers India as an important ally in addressing security challenges, including cyber threats and tensions in the South China Sea, as well as the Indo-Pacific Region. Hence, the EC President sought India’s support for a “peaceful and just deal” for Ukraine’s security during her meeting with Prime Minister Modi.

Talking to Reuters, Ajay Srivastava, the founder of the New Delhi-based think-tank Global Trade Initiative and former Indian negotiator on trade talks with the EU, stressed that the European bloc should acknowledge India as a data-secure country for substantial cooperation. He stated: “While both parties have concerns about China, neither sees it as a top priority.” According to Srivastava, India is concentrating on border tensions with China, while the EU is more concerned with the Ukraine-Russia conflict and NATO-related issues.

Currently, the EU is India’s largest trading partner in goods, with trade nearing USD 126 billion in 2024, marking an increase of about 90% over the past decade.

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Published by Koushik Das

Koushik Das (born on May 16, 1976 in Kolkata) is a career journalist. Based in the Indian capital of New Delhi, Koushik writes mainly about foreign policies and current geopolitical issues, and rarely about other topics. His own political ideas are highly influenced by Antonio Gramsci, Louis Althusser, Michel Foucault, Michael Oakeshott and others. English philosopher and political theorist Oakeshott (Dec 11, 1901-Dec 19, 1990) says that “in political activity, men sail a boundless and bottomless sea. There is neither harbour for shelter nor floor for anchorage, neither starting-place, nor appointed destination. But we have to keep afloat”. (Rationalism in Politics, 1962) As a student of Political Science, Koushik loves to share his views on issues, which have great impacts on his thought process (and also on India, South Asia and of course on the global community), with his readers through his website – Boundless Ocean of Politics. By doing so, he tries to keep himself afloat. You will find some of his articles in https://inserbia.info/today/ (https://inserbia.info/today/author/kou_das13_i/), as he has been trying to assess the global geopolitics since 2003. You can also mail him at kousdas@gmail.com View all posts by Koushik Das