India, EU targets year-end free trade agreement to promote partnerships, innovation
India and the EU are pushing for a comprehensive free trade agreement (FTA) by the end of this year, with both parties stressing that the agreement will be fair, balanced and growth-oriented. According to a report by the PIB, union Commerce and Industry Minister Piyush Goyal said Thursday at the Automotive Component Manufacturers Association (ACMA) annual meeting that the agreement will create new opportunities for businesses and consumers while strengthening long-term economic ties.
Negotiation gains momentum
Goyal stressed that India-EU negotiations are progressing with sincerity and commitment, adding that while each negotiation requires “dedication and acceptance”, the direction is “extremely positive.” He said the deal will facilitate trade, investment, technology transfer and collaboration across industries.
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I am very happy to host your participation in the 13th round of India-EU FTA negotiations. We remain committed to working on a balanced and mutually beneficial FTA as soon as possible to unlock great opportunities for both sides.
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– Piyush Goyal (@piyushgoyal) September 13, 2025
The minister noted that the automotive components sector, which has been supporting India’s manufacturing and export driver, will benefit from the agreement. He said joint ventures, technical cooperation and collaborative research with European partners will help Indian companies innovate, reduce costs and create jobs.
EU phone talks are unprecedented
EU Commissioner for Trade and Economic Security Maroššefčovič described the ongoing negotiations as “the most dense and constructive between the two partners”. He said the process had reached unprecedented levels of trust and earnestness and reiterated the common goal of reaching an agreement by the end of the year, consistent with the commitments of Prime Minister Narendra Modi and European Commission President Ursula von der Leyen.
šefčovič stressed that FTA is designed as a win-win arrangement that balances the interests of producers, exporters and consumers. He added that India, as the global economic engine and the increasing number of European technology and scale, could create strong partnerships for sustainable growth and innovation.
GST cuts bring relief to the automotive industry
Goyal also highlighted recent GST reforms, calling them “landmark relief” for the automotive and agricultural sectors. The government has reduced the GST tax on most automotive components from 28% to 18%, while the tractor rate has been reduced to 5%.
He said the changes will make spare parts more affordable, increase demand, support formalization and create jobs throughout the value chain. Goyal called it “the biggest reform since independence”, saying the proceeds will touch every citizen of the country.
The role of the automotive industry in manufacturing in India
Goyal marks a decade of the “Made in India” initiative, crediting the automotive industry to its “torchbearer”. He said the continued rise in vehicle penetration – from 34 cars per 1,000 people currently, will provide further opportunities for the automotive components industry in the domestic and global markets.
The minister recalled India’s resilience during the 19th pandemic and noted that the country provided drugs and vaccines to more than 100 countries, many of which were free. This strengthens India’s reputation as a reliable global partner, he said. Goyal got his comments, urging industry leaders to stay bold and forward-looking. He quoted Ratan Tata as saying: “Twist the stone man to you and build a monument.” He stressed that, supported by government reform and international partnerships, the industry must leverage resilience and innovation to drive India’s next growth.
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