India, EU set to firm up FTA, defence pact, strategic agenda at summit on January 27

New Delhi: With the world order looking wobbly, the European Union is eyeing to forge a broad global agenda in partnership with India and the two sides are set to firm up a free trade pact, a defence framework agreement and a strategic agenda at their annual summit on January 27.

Top diplomatic sources told PTI that the free trade agreement to be sealed at the summit in New Delhi will be a "living document" on which work could be continued to iron out any issues that remain unresolved.

"India and the EU can set the agenda for global governance, along with France, in the absence of the US," a senior EU official said. "India is one of the big players that we work with and can rely on." The proposed India-EU free trade agreement is expected to bring the relationship between the two sides much closer, with its positive impact being expected in a range of other sectors as well, at a time the world is witnessing trade disruptions in view of Washington's tariff policy.

It is learnt that the two sides have already resolved issues relating to agricultural market access and alcoholic beverages, and are even making progress towards convergence on clauses relating to rules of origin.

However, both sides are yet to find "landing zones" on steel, cars and the EU's Carbon Border Adjustment Mechanism, a tariff on carbon-intensive products such as steel and cement, as well as on certain regulatory mechanisms, the sources said.

"The global environment is more volatile and hostile, and India and the EU desire to create predictability and integrate supply chains," one of the sources said.

The two sides have already concluded 12 chapters of the FTA and have now shifted from rounds of negotiations to continuous engagement on almost a daily basis in both New Delhi and Brussels to close the remaining eight chapters.

In September, Prime Minister Narendra Modi and European Commission President Ursula von der Leyen reaffirmed their commitment to finalise the trade deal by December.

The European Union is India's biggest trade partner with bilateral trade in goods recording $135 billion in the financial year 2023-24. The FTA is expected to significantly enhance the two-way trade ties.

EU trade commissioner Maros Sefcovic is expected to visit New Delhi early in December to further advance the negotiations on the remaining chapters.

The summit between India and the EU will take place over one-and-a-half months after New Delhi hosts Russian President Vladimir Putin, and Brussels is expected to keenly observe the India-Russia summit with interest.

The top EU leadership will grace the Republic Day parade as the chief guest on January 26, and the India-EU summit is set to take place the next day, it is learnt. There is no official announcement yet on the summit or the Republic Day chief guest.

The EU is looking at setting the global agenda with India heading the influential BRICS grouping and France serving as chair of the G7 in 2026, the sources said.

Collaboration between India, the EU and France will help the world to navigate what could be a more challenging year in 2027, when China will lead BRICS and the UK the G20, they said.

Besides firming up the free trade agreement, the defence framework pact and the strategic agenda, the leadership of India and the EU are expected to focus their deliberations at the summit on jointly combating pressing global challenges.

"A multipolar world demands stronger multilateral cooperation, and in this global landscape, India stands out as a pivotal global actor and a natural strategic partner for the European Union," President of the European Council, Antonio Costa, said.

"As we navigate this new era, I look forward to the next steps in elevating our partnership to new heights, including the finalisation of a mutually beneficial and economically meaningful free trade agreement," he said.

Costa said the upcoming EU-India summit will provide a key opportunity to strengthen our ties and promote prosperity, investment, innovation and sustainable growth for both the EU and India through a new joint comprehensive strategic agenda.

The strategic agenda will lay the foundation for a forward-looking, ambitious, balanced, and rules-based partnership, he said.

"The EU and India are well-placed to advance shared priorities crucial for the future, including strengthening resilient and diversified supply chains, driving digital innovation, accelerating the green transition, and deepening cooperation on peace, security and defence matters based on the principles of mutual trust and respect," he said.

The new strategic agenda identifies five areas of shared interest that include security and defence, connectivity and global issues, prosperity, sustainability, and technology and innovation.

Beyond the bilateral dimension, the new strategic agenda highlights EU-India joint engagement on global issues and with third partners, reflecting India's growing global influence.

Under the defence pillar, the document identified maritime security, cyber defence and counterterrorism as areas to expand cooperation.

The new strategic agenda also emphasised on strengthening regional connectivity initiatives, such as the India-Middle East-Europe Economic Corridor (IMEC), and advancing Global Gateway and EU-India trilateral cooperation with and in third countries.