India-EU FTA is a pact whose time has come, Pg16

Key Highlights:

• India and the EU are nearing completion of a Free Trade Agreement (FTA), with 20 of 24 chapters finalized.
• The agreement aims to be concluded before the visit of EU leaders to India this month.
• In 2024, merchandise trade between India and the EU was approximately €120 billion.
• India's merchandise exports from April to December 2025 reached $330.29 billion, a 2.4% increase from the previous year.

Detailed Insights:

• The India-EU FTA seeks to enhance market access and boost trade for both regions, building upon their strong existing trade relationship.
• Sensitive areas like automobiles, alcohol, and the EU's Carbon Border Adjustment Mechanism (CBAM) require careful negotiation to address India's concerns about carbon-intensive exports.
• Increasing pathways for the movement of skilled Indian professionals to the Eurozone is another crucial aspect of the negotiations.
• India has recently finalized trade agreements with Australia, the UAE, and the UK, and an agreement with the EU would further expand access to major global markets.
• Despite progress with the EU, India must continue to pursue trade agreements with the US to diversify its economic partnerships.

Key Concepts Involved:

• Free Trade Agreement (FTA): An agreement between two or more countries to reduce or eliminate trade barriers such as tariffs and quotas.
• Carbon Border Adjustment Mechanism (CBAM): A carbon tax on imports based on the carbon intensity of their production, designed to prevent carbon leakage.
• Merchandise Trade: Trade in goods, as opposed to trade in services.