India-EU Trade Talks Gain Momentum: Early Harvest Deal on the Horizon

As global trade patterns keep evolving, India and the European Union are making consistent headway towards a historic early harvest pact, with an aim of finalizing it by July 2025. The first-of-its-kind agreement, modelled on the lines of India's agreement with Australia, is aimed at opening market access while setting the stage for a full-fledged Free Trade Agreement (FTA).

The early harvest agreement will cover a wide array of issues ranging from tariff cuts to non-tariff barriers, government procurement, technical trade standards, intellectual property rights, and sanitary and phytosanitary measures. All these areas are essential for promoting trade flows between India and the EU while safeguarding both economies' vital sectors.

India's chief negotiator, Satya Srinivas, is currently in Brussels to speed up talks. The two-stage negotiation process along with the FTA also involves a separate bilateral investment protection agreement and mutual recognition of geographical indications that would boost Indian exports such as Darjeeling tea and Basmati rice.

One of the major areas of contention still is drug patents. The EU proposed changes to India's Patents Act to allow 'evergreening', a move that would extend further monopolies on certain drugs. India has, however, repeatedly rejected such proposals, giving more priority to access to affordable generics and safeguarding its domestic drug sector.

The trade relationship is already very strong. Bilateral trade in goods between the EU and India amounted to $137.41 billion in FY2023-24 and the EU emerged as India's largest goods trading partner. Nearly 17 percent of Indian exports are to the EU, which shows the priority of this partnership.

As talks are ongoing, the early harvest arrangement represents more than incremental steps. It is a calculated step toward increased Indian integration into the global markets with protection for some of the most important domestic priorities.