India, EU Launch Security & Defence Partnership, Trade Deal

• India-EU eye security, defence pact at January summit
• Trade deal near, CBAM dispute remains unresolved
• EU leaders to attend India’s 77th Republic Day

India and the European Union are poised to significantly deepen their strategic engagement with the likely launch of a comprehensive security and defence partnership, alongside the conclusion of a long-pending free trade agreement (FTA), during high-level engagements later this month. The announcements are expected when Prime Minister Narendra Modi hosts leaders of the 27-nation European Union as chief guests at India’s Republic Day celebrations in New Delhi.

European Council President António Luís Santos da Costa and European Commission President Ursula von der Leyen will arrive in the Indian capital on January 25 for a state visit. Along with President Droupadi Murmu and Prime Minister Modi, they will witness the military parade marking the 77th Republic Day at Kartavya Path on January 26. The leaders will then participate in the 16th India-EU Summit on January 27.

“Participation of EU leaders as Chief Guests at the 77th Republic Day and the 16th India-EU Summit will further deepen the India-EU Strategic Partnership and advance collaboration in priority areas of mutual interest,” the Ministry of External Affairs stated in New Delhi recently. Echoing this, the European Council said in Brussels: “Trade, security and defence, clean transition and people-to-people cooperation will top the agenda of the discussions.”

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At the summit, Modi, Costa and von der Leyen are expected to jointly announce the conclusion of negotiations on the India-EU Free Trade Agreement. However, the deal is unlikely to include agricultural products, reflecting sensitivities on both sides. Commerce Secretary Rajesh Agarwal told journalists in New Delhi recently, that India and the EU have concluded negotiations on 20 of the 24 chapters of the proposed agreement.

One of the unresolved issues remains India’s demand for exemptions from the European Union’s Carbon Border Adjustment Mechanism (CBAM) for steel and aluminium exports. The CBAM, which came into effect on January 1, applies a carbon price to emissions embedded in certain imported goods. India is seeking carve-outs in the FTA to protect its exporters from the levy, but the EU has so far not agreed.

Beyond trade, security cooperation is expected to be a major outcome of the summit. Progress is anticipated on the proposed India-EU Security of Information Agreement (SOIA), which aims to facilitate the exchange of classified and sensitive information. The SOIA “will lay the foundation of stronger cooperation in areas related to security & defence,” a source aware of New Delhi’s engagements with the EU told.

The agreement is also expected to pave the way for India’s participation in European security and defence initiatives, including selected projects under the EU’s Permanent Structured Cooperation (PESCO), a framework designed to jointly enhance defence capabilities within the bloc.