Amid growing uncertainty over a future Trump administration, India and the European Union are preparing an ambitious set of deliverables for their late-January summit—outcomes that Brussels believes could shape not only bilateral ties but also the global agenda. These include a long-pending free trade agreement (FTA), a new defence and security partnership, and a major push to accelerate the India–Middle East–Europe Economic Corridor (IMEC).
These elements are expected to figure prominently in the joint statement planned after the summit. Despite geopolitical differences—most prominently over Russia—both sides have ensured that disagreements do not derail trade negotiations, signalling strong political intent to upgrade the partnership.
The summit is tentatively scheduled for January 27, and negotiators are confident of concluding the FTA by then, even though a dozen chapters remain open. However, three critical issues continue to block consensus: steel, cars, and the EU’s Carbon Border Adjustment Mechanism (CBAM), a carbon tax on select goods. If the summit goes ahead on January 27, European Commission President Ursula von der Leyen and European Council President António Costa may also serve as chief guests at India’s Republic Day parade.
Before that, the EU is expected to watch closely the outcome of Prime Minister Narendra Modi’s December summit with Russian President Vladimir Putin.
Another major sticking point is the EU’s insistence on embedding Paris Agreement commitments into the FTA as an “essential element.” India views this as a sovereignty concern and maintains that climate obligations should not be linked to trade. Officials say the impasse may require intervention at the highest political levels.
The FTA remains the centrepiece of the expected outcomes. Acknowledging the different levels of development and sensitivities on both sides, EU officials say they are seeking a balanced, commercially meaningful, and “living” FTA—one that can evolve and accommodate future negotiations. The EU, they note, is willing to liberalise five percentage points more trade than India, accepting a degree of asymmetry in India’s favour.
Although only 12 chapters have been formally closed, EU negotiators argue this doesn’t reflect the real progress—most of the remaining chapters are reportedly 90–98% complete, including those covering agricultural and non-agricultural market access. Both sides must still resolve India’s concerns over steel exports and the EU’s demand for stronger access to India’s car market.
The EU’s carbon import tax—CBAM—remains one of the most contentious issues and is considered significant enough to jeopardise the deal. EU officials maintain that domestic laws cannot be renegotiated through an FTA, but both sides are exploring whether a “living agreement” can help navigate regulatory differences over time.
Russia-related issues, including India’s purchase of Russian oil, have not entered the FTA discussions.
A major deliverable could be the creation of an India–EU Security and Defence Partnership, expected to include defence industrial cooperation while addressing concerns about technology leakage.
Progress is also anticipated on IMEC-linked initiatives. The EU is working to advance the EU–Africa–India Digital Corridor, featuring a submarine cable linking Europe to India via the Mediterranean, the Middle East and East Africa. According to the new strategic agenda, the project aims to deliver ultra-high-speed, secure and diversified data connectivity resilient to disruptions from natural disasters or sabotage.
