New Delhi/Brussels: Ahead of the expected conclusion of negotiations on the India–European Union (EU) Free Trade Agreement (FTA) on January 27, EU Trade and Economic Security Commissioner Maros Sefcovic said that both sides’ “red lines” on sensitive sectors such as agriculture and dairy have been fully respected.
In an exclusive interview with CNBC-TV18, Sefcovic said the agreement has been designed in a balanced manner, with safeguards for sensitive product lines even as both sides move toward deep tariff liberalisation.
“The FTA aims to liberalise tariffs in 97–99% of sectors, though not all products will see full duty cuts. Some product lines will have quotas and partial tariff reductions, while others will undergo full liberalisation,” he said.
Trade, Jobs and Investment Boost Expected
Sefcovic said the deal could double job creation and investments by EU companies in India from current levels. Both sides are targeting a doubling of bilateral trade in goods and services from the present $180 billion.
“EU companies are likely to save around €4 billion annually in customs duties once the FTA comes into force,” he said.
The EU is hopeful of implementing the agreement from 2027. Both sides are also working on a rapid response mechanism to address administrative and legal barriers that currently slow down bilateral trade.
EU firms have invested $117.4 billion in India since 2000, accounting for 16.5% of total foreign direct investment (FDI), with around 6,000 European companies operating in the country. Indian companies, in turn, have invested $40.04 billion in the EU.
Autos, Wines, IT, Pharma and Textiles to Gain
Sefcovic said the FTA would benefit multiple sectors, including automobiles, wines, IT services, pharmaceuticals and textiles.
“You will see a good deal for both the EU and India on automobiles, wines and other sectors,” he said, adding that India’s strong IT workforce and pharmaceutical capabilities are well recognised in Europe.
The EU is also working to offer better market access for India’s labour-intensive exports, particularly textiles.
On automobiles, Sefcovic noted differences in market structure, pointing out that the European car market is about 2.5 times larger than India’s. Negotiators are exploring a mix of quotas and phased tariff reductions to address sensitivities on both sides.
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Talks on market access for European wine and spirits have also been positive, though firmly within the agreed red lines on agriculture and dairy.
Strategic Hedge Against Global Volatility
Sefcovic underlined the strategic importance of the FTA, saying it would help both India and the EU hedge against global economic volatility and reduce excessive dependence on the US and China.
“The EU prefers stability, economic security and predictability, and that’s why the deal with India is important,” he said, adding that diversification in areas such as solar panels and critical technologies is a key objective.
The negotiations come at a time when high US tariffs have disrupted global trade flows, prompting both India and the EU to diversify markets and supply chains. The EU currently accounts for 17% of India’s exports, while India receives around 9% of EU exports.
QCOs, GSP and Ratification Timeline
Sefcovic said Quality Control Orders (QCOs) were discussed in detail with Indian authorities, noting that easing such barriers would support trade growth.
“For sectors that earlier relied on Generalised Scheme of Preferences (GSP) benefits, which have ended, the FTA will be much better,” he said, adding that the agreement would offer superior benefits for Indian exporters.
He also said he was encouraged by Commerce Minister Piyush Goyal’s push for early ratification of the deal. Goyal has earlier described the India–EU FTA as the “mother of all deals.”
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