India and the European Union (EU) began the 10th round of negotiations for a proposed free trade agreement (FTA) in Brussels on Monday, with an aim to conclude them by the end of the year.

Both sides have sped up the process as US President Donald Trump has threatened to hike tariffs against India and the EU, along with a host of other countries.

If finalized, the FTA would be the largest of its kind globally and would mark the culmination of years of negotiations.

The renewed push comes after Prime Minister Narendra Modi and European Commission President Ursula von der Leyen met in New Delhi last month.

“A free trade agreement between the EU and India would be the largest deal of this kind anywhere in the world. I am well aware it will not be easy. But I also know that timing and determination count and that this partnership comes at the right moment for both of us,” von der Leyen said during her visit to India.

The FTA talks will take place against the backdrop of increasing trade restriction and rising economic fragmentation—led by Trump. Both India and the EU view the FTA as a way to mitigate risks from geopolitical tensions and growing protectionist policies.

“We both stand to lose from a world of spheres of influence and isolationism. And we both stand to gain from a world of cooperation and working together,” von der Leyen said in a speech during her visit.

Areas of concern

Key sticking points in the negotiations include tariffs and market access. The EU is seeking reductions in India’s high tariffs on cars, wine, and whisky, and better procurement of agricultural products.

Meanwhile, New Delhi wants lower tariffs and greater access for exports such as pharmaceuticals, textiles, and apparel. The country also raised concerns over the EU’s environmental regulations, including carbon border taxes on steel, aluminum, and cement.

Apart from this, India is also looking to get easier access to the EU for its skilled professionals, mainly in the IT sector.

The two sides have also agreed to speed up negotiations on an agreement on investment protection and an agreement on geographical indications, to strengthen economic cooperation beyond trade in goods and services.

Modi had said that both parties have made decisions to “elevate and accelerate India-EU partnership,” rooted in mutual trust and shared democratic values.

India-EU trade relations

The EU is India’s largest trading partner and accounts for €124 billion ($134 billion) in trade in goods in 2023, or 12.2% of India’s total trade. In the same year, trade in services between India and the EU were recorded at $64.8 billion, with a large part coming from digital services.

In comparison, the US and China made up 10.8% and 10.5% of India’s total trade. India is the EU’s ninth-largest trading partner, making up 2.2% of the EU’s total trade.

Even though trade between India and the EU has increased by about 90% in the past decade, negotiations on an FTA have faced repeated delays—primarily due to differences over chief sectors, including agriculture, automobiles, and pharmaceuticals.

Von der Leyen had said that areas such as semiconductors, clean technology, and artificial intelligence (AI) could benefit from an FTA. However, she appeared optimistic about the deal.

“The EU and India have the potential to be one of the defining partnerships of this century. It is why it will be a cornerstone of Europe’s foreign policy in the years and decades to come,” she had said.