World

EU Ambassador Confirms India‑EU FTA Signing in December, Entry into Force by Mid‑2027

By Rezaul H Laskar

The European Union’s new ambassador to India, Jean‑Éric Paquet, said the EU and India are on track to sign their free trade agreement (FTA) in December and expect it to enter into force by the middle of 2027. Paquet explained that the EU and India are also negotiating a bilateral investment protection pact to complement the trade deal. He noted that the EU’s Commission has proposed a signature to the Council of Ministers and that the Indian Ministry of Commerce and the EU have published a schedule of commitments, including tariff reductions and facilitation measures, agreed by negotiators in January. The agreement will need the European Parliament’s assent, which could take a few additional months, after which the FTA would become effective.

Paquet said the investment protection agreement is essential for creating a unified economic space for the two markets, which together represent two billion people and 25 % of global GDP. He added that negotiations on the investment pact are ongoing and that the parties hope to align it with the FTA.

The ambassador also discussed the EU’s carbon border adjustment mechanism (CBAM), noting that it has been in operation since January 1 and will gradually increase until 2034. He explained that the mechanism aims to prevent carbon leakage by assessing the carbon intensity of imported goods and that equivalent carbon mechanisms in partner countries could reduce or eliminate the CBAM charge.

Paquet highlighted the EU’s commitment to supporting India’s transition to cleaner technology, mentioning a €500 million climate fund to aid investments in clean tech and reduce industrial carbon intensity. He said the EU and India are also working on a security and defence partnership, including cooperation on counter‑terrorism, maritime security, and defence industry collaboration. A Defence Industries Forum is expected to be set up in the coming months.

Regarding energy security, Paquet noted that the EU has imposed a price cap on Russian oil to limit financing for Russia’s war machine, while continuing to work with partners in Asia on energy markets. He said the EU’s priority for 2027 is to prepare for the FTA’s entry into force, focusing on trade, services, foreign direct investment, supply‑chain resilience, and de‑risking.

The article was written by Rezaul H. Laskar, Foreign Editor of the Hindustan Times.