By: Indo-US Tribune News Desk

India and the European Union are working toward finalizing a comprehensive trade pact within the next three months, with negotiators expressing optimism about resolving key differences over agriculture, sustainability, and market access. The talks have gained fresh momentum following US President Donald Trump’s tariff offensive, which has reshaped global trade alignments, according to a report by OneWorldOutlook.

The proposed India–EU Free Trade Agreement (FTA) — pending since 2007 — is now viewed as strategically vital for both sides. For the European Union, the deal represents a safeguard against rising trade volatility and a pathway to diversify supply chains away from China and Russia. For India, it signifies growing economic confidence and a chance to shape the future global trade order rather than simply adapt to it.

“Where the EU’s approach is driven by the need to shield its market from global instability, India’s motivation is strategic,” the report noted. “New Delhi sees this deal not as an act of desperation but as an assertion of its global economic leadership.”

India’s expanding manufacturing base, digital economy, and large consumer market position it as an attractive partner for Europe’s industries seeking stability and growth. However, friction remains over the EU’s proposed environmental standards and the Carbon Border Adjustment Mechanism (CBAM). Commerce Minister Piyush Goyal has termed these measures “unfair,” arguing they punish developing economies for emissions they did not historically cause.

Analysts suggest that if finalized, the India–EU trade pact could emerge as one of the most consequential economic agreements in recent decades, reshaping global supply chains and strengthening India’s status as a decisive player in global trade governance.