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India is set to conclude a free trade agreement with the European Union by the end of the year

Recently, Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen announced that the two sides will finalize a free trade agreement by the end of 2025. The agreement is expected to cover a number of areas, including trade, technology, defence and security, thereby strengthening the cooperation between the EU and India.

Despite the potential for a free trade agreement to boost economic ties, EU steel companies have expressed concerns about the impact it will have on the EU steel industry, in particular India's pricing strategy, the EU's carbon border adjustment mechanism and the possible removal of protective trade measures. Experts said the final FTA could weaken the EU's safeguards, especially as unfair competition from India would intensify.

In addition, the agreement is expected to address related trade barriers between the EU and India. India is actively seeking access to the EU market for more of its medicines and chemicals, while the EU has asked India to reduce tariffs on products such as cars, whisky and wine. The Indian steel industry is the core of the negotiations between the two sides, and the EU carbon border adjustment mechanism is also one of the focal points of contention between the two sides. India is strongly opposed to the EU's carbon border adjustment mechanism, and the EU is also reviewing India's safeguards on steel exports.

Von der Leyen stressed that in the current geopolitical environment, the EU needs to be pragmatic and ambitious, and the introduction of bilateral free trade agreements can enhance the resilience of the EU economy and promote green transformation.