January 17, 2026 07:11 AM IST First published on: Jan 17, 2026 at 07:11 AM ISTAfter several years of negotiations, the India-EU trade deal appears to be inching towards a conclusion. Twenty out of the 24 chapters in the free trade agreement are said to have been finalised. The intent, according to a report in this newspaper, is to reach an agreement before the visit of EU leaders to India this month — the President of the European Council, António Luís Santos da Costa, and the President of the European Commission, Ursula von der Leyen, will be chief guests at the 77th Republic Day celebrations. Successfully concluding the deal now — it would be the largest FTA that India has entered into — would be timely and welcome.India and the EU have a strong bilateral trade relationship. The bloc is one of India’s largest trading partners — merchandise trade was at around €120 billion in 2024, while trade in services stood at €59.7 billion in 2023. The EU has also been the source of a significant amount of investment flows into India. An FTA would further ease market access, providing a boost to trade from both sides. There are, however, several sensitive areas, such as automobiles and alcohol, that would have to be dealt with. Equally contentious is the EU’s carbon tax. The carbon border adjustment mechanism (CBAM), which came into force from January 1, will impact carbon-intensive exports from India such as steel and aluminium. The final agreement should address India’s concerns. Another issue concerns the need to increase pathways for movement of skilled Indian professionals to the Eurozone. Sensitivities of both sides will need to be respected. As per reports, India’s red lines have been accepted —contentious agricultural issues have been kept aside.AdvertisementIn recent years, India has stitched up a series of trade agreements with countries like Australia, the UAE and the UK, greatly easing market access. An agreement with the EU now, at a time when trade talks with the US drag on, would increase access to one of the largest economic regions in the world. This could provide a fillip to exports — merchandise exports stood at $330.29 billion during April to December 2025, up 2.4 per cent from $322.41 billion over the same period last year. At the time, India must continue to press ahead with the trade agreement with the US.