0.1 Context

0.1.1 India has made significant progress in trade negotiations with the European Union (EU) amid uncertainty over a US trade deal.
0.1.2 Volatile US trade measures and steep tariffs have dampened India’s export prospects to the US.

0.2 Status of India–EU Trade Negotiations

0.2.1 India and the EU have closed 20 out of 24 chapters of the proposed trade agreement.
0.2.2 Negotiations are continuing on the remaining chapters on a day-to-day basis.
0.2.3 Both sides aim to conclude talks before the upcoming EU leaders’ visit to India.

0.3 Political Significance

0.3.1 The President of the European Council and the President of the European Commission will be chief guests at India’s Republic Day celebrations.
0.3.2 They will also co-chair the 16th India–EU Summit, indicating high political commitment.

0.4 Why the EU Deal Is a Big Deal

0.4.1 The India–EU FTA would be one of the largest trade agreements signed by India.
0.4.2 It could blunt the impact of steep US tariffs on Indian exports.
0.4.3 The EU market offers opportunities for labour-intensive Indian exports.

0.5 Agriculture: A Sensitive Issue

0.5.1 Agriculture is excluded from the proposed India–EU trade agreement.
0.5.2 Agricultural issues have been a major roadblock in India’s trade talks with the US.
0.5.3 Both India and the EU have agreed to keep sensitive agricultural concerns off the table.

0.6 Carbon Border Adjustment Mechanism (CBAM)

0.6.1 The EU began implementing the world’s first carbon tax (CBAM) from January 1.
0.6.2 CBAM applies to imports from energy-intensive sectors such as steel, aluminium, cement, fertilisers and chemicals.
0.6.3 India exports large volumes of aluminium, iron and steel to the EU, making CBAM a key concern.