🤝 Momentum Rises: India-EU FTA Talks See “Substantive Progress” Amid Global Trade Reset

The first week of November 2025 was a period of intense diplomatic activity for India in the realm of Trade Policy and Agreements. While the global context was set by the formalization of the US-China trade truce, the key focus domestically was the critical, week-long round of India-European Union (EU) Free Trade Agreement (FTA) negotiations held in New Delhi. For Indian exporters, particularly those serving the European market, these talks signal a massive potential shift in market access.

1. 🇪🇺 India-EU FTA Negotiations Accelerate

A senior team of negotiators from the European Union visited New Delhi from November 3 to 7, 2025, for a comprehensive round of talks with their Indian counterparts on the proposed FTA.

• Substantive Progress Noted: Both sides concluded the week by expressing satisfaction with the “substantive progress” made across several negotiating areas. The discussions successfully helped to narrow divergences and achieve a common understanding on many outstanding issues.
• Key Chapters Covered: The week-long deliberations covered a wide range of critical chapters, including:
  • Goods, Services, and Investment
  • Trade and Sustainable Development
  • Rules of Origin
  • Technical Trade Barriers
• The CBAM Hurdle: India’s Commerce Secretary, Shri Rajesh Agrawal, emphasized the need for clarity and predictability in the implementation of emerging EU regulatory measures, specifically calling out the Carbon Border Adjustment Mechanism (CBAM) and the proposed new steel regulation. India is pushing to ensure these climate-linked measures do not act as non-tariff barriers that disproportionately impact Indian exports.
• Next Steps: Both India and the EU reaffirmed their commitment to achieving a comprehensive and balanced agreement and agreed to sustain the positive momentum with continued technical-level engagement in the coming weeks to bridge the remaining gaps.

2. 🇬🇧 UK-India FTA: Focus Shifts to Ratification

The Free Trade Agreement between the UK and India, which was finalized and signed in July 2025, shifted its focus this week from negotiation to the complex process of domestic ratification and implementation.

• Economic Impact Discussion: Discussions in the UK Parliament and expert circles focused on the agreement’s projected economic impact. The UK Department for Business and Trade (DBT) forecasts that the FTA will increase the UK’s GDP by 0.13% in the long run.
• Key Wins for India: Experts highlighted that the deal secures duty-free market access for nearly 99% of Indian exports across key sectors like textiles, automotive components, and footwear. The agreement also provides wider opportunities for Indian service providers, professionals, and facilitates the smoother movement of skilled professionals (Mode 4 mobility).
• Implementation Ahead: The final stages of the UK’s ratification process under the Constitutional Reform and Governance (CRAG) Act 2010 are expected to proceed, with the agreement likely to come into force next year. This is a critical development for Indian exporters, including those dealing in building materials like TMT Bars and specialized components, as the UK becomes a preferential, low-tariff market.

3. 🇺🇸🇨🇳 US-China Trade Truce Details Emerge

The one-year trade truce agreed upon by US and Chinese leaders late last week was formally detailed this week, establishing a fragile, temporary calm in the world’s most critical trade relationship.

• Key US Concessions: The US reduced tariffs on certain Chinese imports linked to fentanyl precursor chemicals from 20% to 10%, which lowers the overall average US tariff rate on Chinese goods to roughly 47% (still severely high). The US also agreed to pause an expanded Commerce Department blacklist for one year.
• Key China Concessions: China formally paused its recently announced export controls on rare earth minerals for one year and committed to increased purchases of US soybeans. China also agreed to remove retaliatory measures against US shipping and technology firms.
• Global Implication: The de-escalation removes the immediate threat of a major tariff spike (like the 100% duty previously threatened by the US), injecting some stability into global supply chains. However, the persistently high 47% tariff remains a powerful incentive for global companies to continue diversifying their supply chains away from China and toward manufacturing hubs like India.