India, EU to Continue Talks on Steel, Auto, and Carbon Tax Under FTA Negotiations

New Delhi, October 29, 2025: India and the European Union have agreed to continue discussions on issues relating to steel, automobiles and carbon tax under the proposed FTA as these areas carry higher sensitivities, the Commerce Ministry said on Wednesday.

During his three-day visit to Brussels, Commerce and Industry Minister Piyush Goyal met EU Commissioner for Trade and Economic Security Maros Sefcovic to review the progress made so far in the negotiations. His official visit concluded on October 28.

Focus on Sensitive Sectors and Regulatory Clarity

Both sides have agreed that the issues related to steel, auto, CBAM, and other EU regulations need more deliberations, said the ministry. CBAM will levy 20–35 per cent tariffs on Indian exports of steel, aluminium, and cement to the EU.

India has also expressed its concerns with respect to the EU Deforestation Regulation, which will impact exports of various commodities like coffee, leather hides, and paperboard from India, valued at close to $1.3 billion per year, according to a report by the Global Trade Research Initiative.

India Pushes for Balanced Trade Framework

The ministry said India has sought the resolution of both tariff and non-tariff barriers in the pact and called for transparent and predictable regulatory frameworks to support bilateral trade.

India has emphasized during the Brussels discussions the need for preferential treatment of labor-intensive sectors. Both sides agreed to work towards finalization of the non-sensitive industrial tariff lines and discussed India’s concerns over non-tariff measures and new EU regulations.

Commitment to Conclude Talks by 2025

India and the EU reiterated their shared commitment to completing the talks on the proposed FTA by the end of 2025. To take the talks forward, an EU technical team, led by the Director General for Trade, will come to India next week for further negotiations.

The meeting followed the 14th round of FTA negotiations held from October 6–10, and separate talks between Commerce Secretary Rajesh Agrawal and European Commission Director General for Trade Sabine Weyand in Brussels.

Expanding Trade Relationship

The negotiations on a comprehensive FTA, investment protection agreement, and geographical indications pact restarted in June 2022 after an eight-year halt since 2013.

Bilateral merchandise trade with the EU reached USD 136.53 billion in the financial year 2024-25, comprising USD 75.85 billion of exports and USD 60.68 billion worth of imports. The EU continues to be India’s largest goods trading partner, with a 17% share in India’s total exports and 9% in its imports.

Key Negotiation Areas

In return, the EU is seeking duty cuts on products such as automobiles, medical devices, wine, spirits, meat and poultry, and greater protection of intellectual property. The most important Indian exports to the EU are readymade garments, pharmaceuticals, steel, petroleum products, and electrical machinery. The scope of the FTA negotiations encompasses 23 policy areas, which include trade in goods and services, investment, competition, customs facilitation, rules of origin, and sustainable development.

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