India and the European Union are working towards reaching a trade deal by the end of the year as talks between the two parties have reached a crucial phase, Maros Sefcovic, EU trade commissioner, said in New Delhi on Friday.
Sefcovic, who is in his third visit to India this year, said the parties would be able to meet the deadline, given ‘the political will on both sides’, even as he cautioned that there may not be in agreement on everything.
“But as major democracies, in an increasingly uncertain world, there are a lot of areas where we can work together,” the EU trade chief said at the 65th annual session of the Automotive Components Manufacturers Association of India, with Union commerce minister Piyush Goyal sitting beside him.
The EU is India’s biggest trading partner in goods, with bilateral trade hitting $137.5 billion in 2023-24, up nearly 90 per cent over the past decade. The trade talk between the two partners gained momentum in the shadows of the tariff uncertainties unleashed by US President Donald Trump.
The EU has reached a trade deal with the US, having agreed to pay a 15 per cent duty while opening up its markets for American products. In contrast, India has been slapped with a 50 per cent duty by Trump and the trade talks with the US are stalled till now.
Alluding to the uncertainties, Sefcovic said, “We find ourselves in a challenging world. Geopolitics and global trade are being disrupted. And we need to embrace the possibilities offered by our new reality as much as protecting ourselves from the risks.
“Which is why we are working on a deal to unlock investment, reduce barriers, expand market access, and enhance supply chains, to the benefit of both sides.”
Echoing Sefcovic’s comments, Goyal said negotiators were working hard for a balanced and mutually beneficial deal that would unlock opportunities for both sides in trade, investment, technology transfer, and deeper economic engagement.
The talks come at a time when Trump has demanded that the EU slaps 100 per cent tariff on India and China in a bid to pressure Russia to end the war in Ukraine. China and Russia are two biggest buyers of Russian crude oil. However, EU officials told Financial Times that it would be difficult for them to accept the US request, since India is a vital trade partner.
Trump is now asking G-7 members to impose a 100 per cent tariff on China and India. Canada, which holds the presidency of the G-7, convened a meeting of the group’s finance ministers on Friday to “discuss further measures to increase pressure on Russia and limit their war machinery”, according to a statement.