India–EU Relations Gain Momentum: Trade Pact and Ukraine Peace on the Agenda

India and the European Union are stepping up efforts to finalize their long-pending Free Trade Agreement (FTA), with both sides signaling urgency to conclude negotiations by the end of 2025. Prime Minister Narendra Modi recently held a joint call with European Council President António Costa and European Commission President Ursula von der Leyen, where the FTA was a central theme. The leaders stressed the need to strengthen economic and strategic cooperation across trade, technology, sustainability, and supply-chain resilience.

Adding to this momentum, EU Trade Commissioner Maroš Šefčovič is scheduled to visit New Delhi on September 11 for an intensive round of talks. According to India’s Commerce Minister Piyush Goyal, negotiations are “making rapid progress,” with several chapters already concluded. External Affairs Minister S. Jaishankar has also reiterated that India is aiming for a decisive conclusion, reflecting New Delhi’s determination to close the deal after years of stalled discussions.

PM Modi held a joint telephone call with President of the European Council Antonio Costa and President of the European Commission Ursula von der Leyen | India Today

Areas of Progress and Challenges

Negotiations have moved forward on several fronts, with agreements reached on key aspects such as intellectual property and trade facilitation. However, challenges remain in sensitive sectors like dairy, rice, automobiles, and alcoholic beverages. Another contentious point is the European Union’s proposal for oversight on capital flows, which India has resisted, citing sovereignty concerns and the need for flexibility during economic crises.

Despite these hurdles, both sides appear more committed than ever to finding common ground. Analysts view the trade pact as an opportunity to elevate India–EU relations into a comprehensive strategic partnership that goes beyond commerce, setting global benchmarks in areas such as green energy and sustainable trade.

India’s Role in the Ukraine Conflict

Beyond trade, the dialogue also focused heavily on the Ukraine war and its global impact. European leaders underlined the conflict’s threat to international security and economic stability, emphasizing that India could play a vital role in pressing Russia toward peace. Von der Leyen described India’s diplomatic leverage as “crucial,” particularly given New Delhi’s open channels of communication with Moscow.

Prime Minister Modi reaffirmed India’s position in favor of dialogue and diplomacy, reiterating his support for a peaceful resolution. India’s ongoing engagement with Ukrainian President Volodymyr Zelenskyy was highlighted as part of its efforts to balance relations while maintaining its strategic independence. European partners welcomed this stance, urging India to continue advocating for negotiations that could restore regional stability.

A Strategic Context Beyond Bilateral Trade

The India–EU FTA is not being negotiated in isolation. It fits into India’s broader trade diversification strategy, which has seen the country signing landmark agreements with the UK and the European Free Trade Association (EFTA) earlier this year. The UK pact, inked in mid-2025, is expected to boost bilateral trade by billions annually, while the EFTA deal includes an unprecedented investment commitment of $100 billion over the next 15 years.

These developments show that India is positioning itself as a key player in shaping the future of global trade. At the same time, European countries view India as a vital partner in counterbalancing both security challenges and economic dependencies. Germany, for instance, has expressed strong support for India in speeding up trade talks, while also encouraging New Delhi to use its diplomatic weight to bring Russia closer to peace negotiations.

The MGMM Outlook

India and the European Union are making significant strides toward finalizing their Free Trade Agreement, a deal that has remained pending for years but now shows real momentum. With Prime Minister Modi’s joint call with European leaders and upcoming high-level meetings in New Delhi, both sides are signaling urgency. While certain sectors such as dairy, rice, and automobiles remain contentious, the progress on intellectual property, trade facilitation, and sustainability reflects a deeper alignment. For India, this FTA is not just about trade—it is about strengthening its role in global supply chains, technology partnerships, and green energy commitments, while also reinforcing its strategic independence.

At the same time, India’s balanced role in the Ukraine conflict has further enhanced its credibility as a global mediator. By maintaining open channels with both Russia and Ukraine while firmly supporting dialogue and diplomacy, New Delhi has positioned itself as a responsible global actor. European leaders see India’s involvement as crucial in pressing for peace and ensuring stability, making the partnership more than economic—it is also about shared responsibility for global security. Together, India and the EU appear to be moving toward a comprehensive alliance that could shape the future of global trade and diplomacy.

(Sources: India Today, Mint, NDTV)