2 weeks ago
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President of the European Commission Ursula von der Leyen erstwhile again called for an concern statement betwixt India and the European Union (EU), terming it a “missing portion of the puzzle” successful the practice plans of the 2 economies.
Ms. von der Leyen was speaking astatine the European Business Round Table for Industry successful Gothenburg, Sweden, wherever Prime Minister Narendra Modi besides delivered his address.
The concern agreement, being negotiated alongside the commercialized deal, was not finalised arsenic the 2 sides could not hold connected immoderate cardinal aspects, the astir notable being quality resolution.
‘Half the equation’
“But commercialized is lone fractional the equation,” Ms. von der Leyen said. “Our adjacent measurement indispensable beryllium to present an concern agreement. This is the missing portion of the puzzle successful our reinforced economical cooperation, particularly successful a satellite wherever proviso chains are being reshaped, and economical information challenges america arsenic ne'er before. Deepening our concern ties volition assistance america to de-risk and diversify.”
During his address, Mr. Modi did not interaction upon the concern statement but alternatively highlighted the benefits of the commercialized woody and the different agreements that person been signed betwixt the EU and India.
“The India-EU FTA volition make caller opportunities for industries, investors, and innovators,” Mr. Modi said.
“The Security and Defence Partnership and the Mobility Agreement person fixed caller spot to our strategical and people-centric partnership,” helium added. “The India-EU Trade and Technology Council has further deepened our cooperation. We are moving unneurotic successful areas specified arsenic integer technology, cleanable energy, semiconductors, resilient proviso chains, and innovation.”
‘Trade statement opened the door’
In the 26 years betwixt January 2000 and December 2025, European countries person invested a small much than $110 cardinal arsenic nonstop concern successful India, making up for astir 14% of the full overseas nonstop concern India has attracted during the period.
However, the astir caller years uncover sizeable volatility successful the inflows from Europe.
For example, FDI from Europe stood astatine astir $5.5 cardinal successful 2025, having fallen from astir $10.6 cardinal successful 2024, which had seen a important summation implicit the $5.3 cardinal successful 2023.
Consequently, Europe’s stock successful India’s full FDI fell to little than 10% successful 2025 from astir 20% the twelvemonth before, and astir 13% successful 2023. Ms. von der Leyen indicated that an concern statement would heighten concern flows.
“Basically, 1 tin accidental that the commercialized statement opened the door,” Ms. von der Leyen added. “An concern statement walks america done it.”
On Tuesday (May 19), Mr. Modi volition conscionable Nordic leaders from Denmark, Sweden, and Finland astatine the Nordic India Summit wherever the India-EU escaped commercialized statement volition beryllium discussed again.
Norway and Iceland — besides portion of the Nordic Summit — are EFTA countries that signed a abstracted Trade and Economic Partnership Agreement (TEPA) with India successful 2024, which came into unit successful 2025. The juncture volition besides spot a stock-taking of the advancement of this woody frankincense far.
Compliance and quality resolution
According to respective radical who person been tracking the negotiations betwixt India and the European Union, the biggest origin holding up the concern statement were the differences betwixt the 2 economies connected quality resolution. Other issues pertain to concerns implicit onshore acquisition, judicial protections, and exit clauses.
India had successful 2017 unilaterally enactment an extremity to astir each its Bilateral Investment Treaties (BITs), and has subsequently announced a caller attack to quality solution that has engendered uncertainty among overseas investors.
The cardinal contented is that, nether the BITs, disputes implicit overseas concern utilized to beryllium arbitrated successful a 3rd country. The caller model seeks to regenerate this with an India-centric quality solution process.
