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EU leaders to attend India's Republic Day amid trade talks
European Council President Antonio Costa and European Commission President Ursula von der Leyen will join India's Republic Day celebrations on Monday, using the occasion to advance long-stalled free trade negotiations with New Delhi.
Geopolitical stakes drive urgency
The visit comes as Europe seeks to diversify trade partnerships amid tensions with the U.S. and China. India, facing 50% U.S. tariffs, is similarly eager to reduce dependence on Washington.
"This signals India's commitment to a diversified foreign policy, independent of U.S. pressures," Chietigj Bajpaee of Chatham House told the BBC.
Deal could be finalized this week
Reports suggest the agreement-dubbed the "mother of all deals" by von der Leyen and India's Trade Minister Piyush Goyal-may be announced during a high-level summit on January 27. Negotiations, ongoing for nearly two decades, are nearing conclusion.
The pact would be India's ninth free trade agreement in four years, following deals with the UK, Oman, and New Zealand. For the EU, it follows recent agreements with Mercosur, Japan, and Vietnam.
Economic benefits and sticking points
The EU is India's largest trading partner, with bilateral trade valued at $137 billion in 2025. India exported $76 billion worth of goods to the EU while importing $61 billion, securing a trade surplus. However, the EU's 2023 withdrawal of Generalised System of Preferences (GSP) benefits hurt Indian exporters, particularly in garments, pharmaceuticals, and steel.
"An FTA would restore market access and help Indian firms mitigate U.S. tariff shocks," said Ajay Srivastava of the Global Trade Research Initiative.
Yet challenges remain. India is expected to shield agriculture and dairy from liberalization, while gradually reducing tariffs on cars, wine, and spirits-mirroring its approach in past deals.
Key disputes
The EU is pushing for stronger intellectual property protections and data security standards. India, meanwhile, opposes the EU's Carbon Border Adjustment Mechanism (CBAM), which imposes charges on carbon-intensive imports.
"CBAM acts as a new border tax on Indian exports, even if import duties are eliminated. This disproportionately affects small businesses,"
Ajay Srivastava, GTRI
Long-term strategic gains
Analysts say the deal could accelerate trade decoupling from the U.S. and China, reducing vulnerabilities to tariffs and supply chain disruptions.
"India's shift away from Russian oil since November 2025 may ease the pact's approval in the EU Parliament," said Sumedha Dasgupta of the Economist Intelligence Unit. She added that Europe's strained relations with the U.S. since early 2026 have made the deal more appealing.
Despite hurdles, experts call the agreement a potential "win-win," strengthening economic ties between two markets representing a quarter of global GDP.
