External Affairs Minister S Jaishankar has described the proposed India-EU Free Trade Agreement as potentially transformative, saying it could have a cascading impact on the overall bilateral relationship. Negotiations for the India-EU FTA, formally called the Broad-based Trade and Investment Agreement, resumed in 2022 after a decade-long pause. The EU is India's largest trading partner bloc, and both sides are pushing to conclude a comprehensive deal covering goods, services, and investments.

The India-EU FTA, officially termed the Broad-based Trade and Investment Agreement (BTIA), has a long and complicated history. Negotiations began in 2007 but stalled in 2013 over disagreements on tariff reductions, data security, intellectual property rights, and the EU's insistence on labour and environmental standards. They resumed in June 2022 following the India-EU Leaders' Meeting.

The EU collectively is India's largest trading partner, with bilateral trade in goods and services exceeding €120 billion annually. The FTA would potentially cover tariff liberalisation on goods, services market access (especially for Indian IT and professionals), investment protection, and government procurement.

For exam purposes, the key static concepts are: (1) What is an FTA vs. a Comprehensive Economic Partnership Agreement (CEPA)? An FTA primarily covers goods; a CEPA is broader, covering services, investments, and IPR. (2) The EU operates through a Customs Union, meaning individual member states cannot negotiate separate trade deals — the European Commission negotiates on behalf of all 27 members. (3) India already has CEPAs with the UAE and Australia (2022) and a long-standing FTA with ASEAN (2009). The EU FTA, if concluded, would be India's largest trade deal by partner size. (4) Non-tariff barriers, carbon border adjustment mechanisms (CBAM), and the EU's deforestation regulation are complicating factors in current talks.