The EU and India are nearing a conclusion on a wide-ranging Free Trade Agreement, with German Chancellor Merz saying an accord could be reached by the end of January after talks with Prime Minister Modi in Gujarat.

The negotiations cover industrial and agricultural market access, services, investment rules, intellectual property, public procurement, and sustainable development, with the EU’s Carbon Border Adjustment Mechanism among the main sticking points.

If finalized, the deal would be the EU’s most significant trade agreement with a large emerging economy in over a decade, expanding ties beyond China and aiming to secure critical supply chains.

Should a political agreement be reached by late January, the process would proceed to legal scrubbing, translation, signature, and ratification, subject to approvals by EU member states and potentially the European Parliament; investment protection provisions may require additional national actions.

Beyond trade, the visit yielded bilateral accords on defense cooperation, skills and mobility, health, education, climate and energy cooperation, and critical minerals, with Germany urging India to reduce dependence on Russia in energy and defense.

Key participants underscore progress, with Merz emphasizing security ties and reduced Russian reliance, while India’s Commerce and Industry Minister Piyush Goyal signs that negotiations are in their final stages, targeting late January completion.

Negotiations have been underway since June 2022, and a New Delhi–hosted EU–India summit on January 27, 2026, hinges on finalizing the trade text.