EU and India target trade deal this year

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India and the EU have agreed to push for a trade agreement this year, European Commission president Ursula von der Leyen has said, renewing efforts to shore up ties in the shadow of tariff threats from US President Donald Trump.

The commission chief is leading a delegation of senior officials to New Delhi this week aimed at bolstering the bloc’s relations with India.

She added that the EU was “exploring a future security and defence partnership with India” along the lines of pacts with Japan and South Korea, which would cover areas including terrorism, maritime security, cyber security and attacks on critical infrastructure.

While years of trade negotiations between the EU and India have failed to produce an agreement, Trump’s return to the US presidency has spurred impetus from Brussels to close trade deals.

Since November, the bloc has signed a long-awaited agreement with the South American Mercosur bloc, refreshed one with Mexico and reopened moribund negotiations with Malaysia.

Trump has attacked India, which has some of the highest import duties of any major economy, as a “tariff king” and has announced plans to impose 25 per cent tariffs on all imports from the EU.

In a speech in New Delhi on Friday, von der Leyen said an EU-India pact would be “the largest deal of its kind anywhere in the world” and vowed talks would move ahead quickly.

“I am very well aware it will not be easy, but I also know that timing and determination counts and that this partnership counts at the right moment,” she said.

“This is why we have agreed with Prime Minister [Narendra] Modi to push to get it done during this year, and you can count on my full commitment to make sure we can deliver.”

India and the EU began trade negotiations in 2007, but the effort foundered in 2013. Talks were dormant for almost a decade before restarting in 2022, but large differences remained on issues including access to the Indian market for European cars and spirits.

India has also accused Brussels of over-reach in areas including environmental practices and labour rights.

Modi’s government has been a tough trade negotiator, including with the UK and the European Free Trade Association, the bloc whose members include Switzerland, with which it signed an agreement last year.

“The commission will be driving a hard bargain to make sure that we have an ambitious as well as a commercially meaningful free trade agreement that covers tariffs and non-tariff barriers,” said a senior EU official this week. “Of course, we are ready to respond to India’s requests as well.”

During a visit by Modi to Washington this month, India and the US agreed to negotiate the first tranche of a “mutually beneficial, multi-sector” bilateral trade agreement by autumn.

This came after Trump criticised India’s “unfair, very strong tariffs” and threatened to levy reciprocal measures if New Delhi did not lower theirs.

This week, India and the UK also relaunched long-running talks on a trade deal, which began in 2022 but were put on hold last year as the two countries held parliamentary elections.