Trade Deal On Cards As EU Leaders Visit India For Republic Day Celebrations

New Delhi is preparing for a high-stakes diplomatic and economic moment as India and the European Union move to clinch a long-pending Free Trade Agreement (FTA) during the 16th India-EU Summit on January 27, when the bloc's top leadership will be in the capital as chief guests for India's 77th Republic Day celebrations.

President of the European Council Antonio Costa and President of the European Commission Ursula von der Leyen will be on a state visit to India from January 25 to 27 at the invitation of Prime Minister Narendra Modi. Besides attending the Republic Day parade, the two leaders will also co-chair the summit with PM Modi and hold meetings with President Droupadi Murmu, as well as restricted and delegation-level talks with the Indian leadership. 

An India-EU Business Forum is also expected to take place on the sidelines, underscoring the economic focus of the visit.

At the heart of the summit is the long-negotiated India-EU Free Trade Agreement, formally known as the Broad-based Trade and Investment Agreement (BTIA). Negotiations were first launched in 2007, stalled for years, and then relaunched in 2022 amid a changing global economic and geopolitical landscape. Talks were fast-tracked in February 2025 during Ursula von der Leyen's visit to India, and officials on both sides now say the finish line is in sight.

Government sources indicate that negotiations have made substantial progress, with 20 out of 24 chapters already closed. Only a handful of issues remain, and the next few days are seen as crucial for the final round of bargaining. Commerce and Industry Minister Piyush Goyal's recent visit to Brussels is described by officials as a "decisive step" in pushing the talks towards conclusion.

India's Commerce Secretary has said that there is a clear intent on both sides to wrap up the negotiations before the leaders' meeting. "If we can have a deal ready, there could be an announcement," he noted, signalling a strong political push to showcase the agreement during the high-profile visit. Importantly, sensitive agricultural issues – long a stumbling block in the negotiations – have reportedly been kept outside the scope of the pact, easing domestic political concerns in both India and several EU member states.

If signed, the FTA would mark one of India's most significant trade deals and a breakthrough for the EU in Asia. The agreement is expected to boost two-way trade, deepen investment links, and integrate supply chains across sectors such as manufacturing, technology, clean energy, pharmaceuticals, and services. However, some complex issues remain, including market access in certain industrial sectors and the EU's Carbon Border Adjustment Mechanism (CBAM), which India has flagged as a potential trade irritant.

The broader political context is also favourable. India and the EU have been strategic partners since 2004, and ties have expanded notably in recent years, especially after the unprecedented visit of the entire EU College of Commissioners to India in February 2025. In October 2025, the EU Council endorsed a new strategic agenda for relations with India, focusing on prosperity and sustainability, technology and innovation, security and defence, and global connectivity.

Against this backdrop, the presence of the EU's top leaders as chief guests at the Republic Day celebrations is being seen as a strong political signal. As President Costa recently said, India is a "crucial partner" for the EU, and the summit offers an opportunity to translate strategic convergence into concrete economic outcomes. If the FTA is announced on January 27, it would crown nearly two decades of negotiations and open a new chapter in India-EU relations.