European Commission President Ursula von der Leyen is leading an “unprecedented” delegation to New Delhi to negotiate a trade deal
The European Union is seeking to raise the issue of India’s lack of support for Western sanctions against Moscow during an “unprecedented visit” by a delegation led by European Commission President Ursula von der Leyen to New Delhi on Thursday and Friday. The 27-member grouping is looking to secure a Free Trade Agreement (FTA) with the Narendra Modi government amid concerns over US President Donald Trump’s tariff policy
An EU official told the Indian Express that Ursula von der Leyen could bring up the topic of enforcing sanctions against Russia with New Delhi in the upcoming talks.
“One specific point that I expect the President to raise in the context of Russia’s aggression is not just our support for Ukraine, but also the sanctions that we maintain on Russia and the cooperation we have with India, which we want to continue and intensify around the enforcement of those sanctions,” the official said.
India has not joined Western sanctions against Moscow despite pressure from Washington and Brussels. India has become one of Russia’s largest oil buyers, despite unprecedented sanctions imposed by Western governments against the Russian energy and financial sectors. India-Russia bilateral trade exceeded $65 billion in the 2023-24 financial year – a fivefold increase compared to 2021.
EU is “seeking to drive a hard bargain” to ensure a “commercially meaningful FTA,” Indian Express reported on Wednesday, quoting an EU official. The EU will be looking to reduce tariffs on certain items such as cars, whiskey, and wines. “India’s market is relatively closed, especially on key products of commercial interest to the European Union and to our member states’ industries. These include cars, as well as wines and spirits,” the official told the outlet.
The EU’s demand for lower tariffs from New Delhi comes after the two sides have concluded nine rounds of talks, with the tenth round of negotiations set to take place in March in Brussels. The talks were also taking place amid US President Donald Trump’s intentions to impose 25% tariffs on imports from the EU and raise tariffs on imports from India, which he called “a very big abuser of tariffs.”
India, for its part, is reportedly seeking concessions for its small industries amidst concerns that the EU’s carbon border adjustment mechanism (CBAM) could lead to high duties on Indian steel and aluminum products. Also, India’s textile industry is currently at a disadvantage in Europe, considering that textile exports face an additional 10% duty due to the absence of a trade deal. An FTA with the bloc would bring India’s textile exports on par with those of its competitors such as Bangladesh and Vietnam.
The EU is India’s largest trading partner after the US, with trade in goods valued at 124 billion euros in 2023, with an increase of almost 90% in the last decade. Around 6,000 European companies are present in India, directly providing 1.7 million jobs and indirectly supporting 5 million jobs across various sectors, according to official data.
Talks for an FTA between New Delhi and the bloc were initiated back in 2009 but were later stalled “due to differences in the scope and expectations from the deal,” according to New Delhi’s statement. The negotiation process was relaunched in 2022.
