The India–EU Free Trade Agreement (FTA) is shaping up to be one of the most consequential trade negotiations, both economically and strategically. Nicolas Köhler-Suzuki, advisor for Trade and Economic Security at the Jacques Delors Institute, joined host Vrinda Sahai on the Interpreting India podcast to unpack what’s in the agreement, what’s missing, and what will determine its success in the years ahead. Portions of their conversation are below and have been edited and condensed for clarity.

Vrinda Sahai: Both the EU and India have been cautious about trade liberalization in the past. What factors have led to a renewed momentum for trade agreements?

Nicolas Köhler-Suzuki: For most of the time, the honest answer to when this deal will happen was probably undetermined. The negotiations started in 2007 and for the best part of the decade, they were in what I would call a “zombie state.” What changed is that the world changed around both India and the EU, faster than anticipated. We must understand the three forces that converged almost simultaneously. The first and most obvious one is Trump. The United States slapped tariffs of up to 50 percent on Indian exports in mid-2025 - 25 percent reciprocal, 25 percent for Russian oil purchases. The EU also got hit with 15 percent baseline tariffs even after a deal. Suddenly, both sides found themselves at the receiving end of American aggression and the political incentive was to show the world that you have other friends. The second force is China. For the EU, the exposure to China is structural—earths, technologies, battery components, pharmaceuticals. India can offer something that no other partner of a comparable scale can: a very large English-speaking economy with a young workforce and strong ambitions for manufacturing. For India, the calculation is similar but in reverse. Delhi has been trying to reduce their dependency on China for years. The third force is the EU’s phasing down of the Generalized System of Preferences (GSP) for India. From the beginning of January of this year, India lost preferential treatment for almost all its exports to the EU, while Bangladesh and Vietnam could get duty-free access. India also wanted to be part of the Regional Comprehensive Economic Partnership Agreement but left in 2019 because of China. Instead, India went on a spree to sign bilateral agreements, with the UAE, Australia, EFTA, and the UK, more than nine different deals in the last four years, each successively deeper than the previous ones. The EU in this whole chain was the biggest prize still available.

Vrinda Sahai: How significant is this agreement, and what are the key differences when compared to other EU trade agreements?

Nicolas Köhler-Suzuki: Compared to other EU agreements, the clearest gap is that there’s no chapter on government procurement. India’s government public procurement market is worth roughly $600 billion a year and the EU got nothing. The second big gap is the sustainability chapter. The EU–New Zealand FTA has an enforceable mechanism for the Paris Agreement. For the EU-India deal, we see cooperation, dialogue, expert review, but there’s no penalty mechanism. India rejected the EU’s specific model, perceiving it as an instrument of regulatory leverage. The third difference is investment protection, which was nominally deferred and is still to be negotiated. Overall, on tariffs and services, this is probably the most ambitious deal India has ever signed, but on procurement, sustainability, and investment, it is quite different from the EU’s usual practice.

Vrinda Sahai: To what extent do EU regulations become non-tariff barriers? How is the EU responding to these concerns?

Nicolas Köhler-Suzuki: The Indian position is not entirely without foundation. The argument goes: you give us a trade deal that cuts tariffs, but what’s the point of zero duty access if our rice gets rejected at the border because your pesticide residue limit is a hundred times stricter than the American one, or if our medical devices need a hundred thousand euro in registration fees for each product before they can enter the market, or if our steel gets hit by a carbon border tariff adjustment that wipes out any advantages we just negotiated. In India, European regulations are often seen as a form of hidden protectionism or regulatory imperialism. India did not get an exemption on the Carbon Border Adjustment Mechanism. India’s blast furnace steel emits about one and a half times the global average carbon emissions. What India did get instead was a Most Favoured Nation clause, a financial commitment of €500 million for a green transition, and a technical dialogue on India’s own carbon trading scheme. However, decarbonizing India’s heavy industry requires something in the region of €390 billion. On Sanitary and Phytosanitary Standards, between 2020 and 2024 the EU’s food safety alert system flagged over 850 notifications related to Indian food products. Indian exporters say these limits are so low that they cannot reliably measure them with the testing equipment they have. The Food and Drug Administration (FDA) introduces clear timelines for import approvals, but Indian imports must still meet EU rules without exception. On the general regulatory environment, the FDA has a chapter on good regulatory practices with advanced notification of new regulations, non-discriminatory stakeholder consultations, and regulatory impact assessments, which are useful mechanisms, but much less ambitious than mutual recognition protocols the EU has with partners like Canada.

Vrinda Sahai: What does the chapter on good regulatory practices mean on a day-to-day basis once it comes into effect?

Nicolas Köhler-Suzuki: These chapters sound boring, but they are the ones that determine whether a deal works in practice. A tariff schedule gets headlines, but these questions of regulatory cooperation determine the outcome. Consider an Indian pharmaceutical company wanting to export a generic medicine, a registration process that can take several years and cost hundreds of thousands of euros per product, possibly involving testing requirements that duplicate what is already done in the home market. What these chapters on good regulatory practices do is impose discipline on process for both sides. You must have advanced public notification before either side introduces a new regulation that could affect trade. They must allow stakeholders from the other side to comment at an early stage. Both sides must be able to analyze whether proposed measures are necessary and if there are alternatives that are less trade-restricting. Indian companies will get the same right to participate in European consultation processes on new regulations as European companies do. None of this is exactly revolutionary, but if you’ve seen what the Bureau of Indian Standards has done in the last couple of years, European firms have cared about this quite deeply.

Vrinda Sahai: How significant are the mobility provisions for Indians under this FTA, and what does that mean going forward?

Nicolas Köhler-Suzuki: This is the question that nearly killed the original negotiations back between 2007 and 2013. India wanted 50,000 visas a year, 20,000 of those for the UK. Europe’s labor market has shifted significantly since then, Germany has 700,000 unfulfilled IT positions, and the EU’s demographic trajectory is not on a good track. At the same time in the US, there’s more difficulty for skilled migration, with bigger visa fees proposed on H1B visas and longer processing times under the Trump administration. Europe suddenly looks like a path of lesser resistance if you’re Indian tech talent. What they did differently this time is separate the question of mobility from the trade agreement itself. This helps with ratification because you don’t have to get approval from far-right parties for the trade agreement text. It also acknowledges that migration policy is not really a competence for the EU, you cannot tell France or Germany how many Indian professionals it will admit. What they created is a comprehensive framework of cooperation on mobility, separate from the FTA but announced on the same day. This framework creates a template for member states for fast-tracking work permits, especially for study, research, and seasonal work for up to 12 months. It also establishes an EU Legal Gateway Office in New Delhi as a one-stop shop. Indian IT services exports to the EU are already at about $20 billion.

Vrinda Sahai: In a best-case full implementation scenario, what does success look like by 2031 or 2036?

Nicolas Köhler-Suzuki: According to projections from the Kiel Institute, bilateral trade volumes could go up 51 to 65 percent for EU goods exports to India, meaning roughly doubling to €97 billion in just the next five years. EU chemicals exports, for example, could rise by almost €12 billion. These trade volume numbers are useful for press releases, but the more interesting measures are structural such as about the integration of the European and Indian economy. Success from my perspective, in five to ten years, would mean that European pharmaceutical companies would manufacture more active ingredients in India rather than sourcing them from China. It would mean Indian pharmaceutical firms and chemical firms becoming tier one suppliers into European industrial value chains. It would be a big success if the clean energy partnership produced tangible results, and if European electronics companies-built production capacity in India as a China-plus-one strategy and not just moving some final assembly for the Indian market. The Kiel Institute estimates that while Indian exports rise, Chinese exports would concurrently fall 5 to 10 percent because of the FTA, what economists call trade diversion, a reorganization of supply chains. That’s probably the most important metric to see whether there’s a strategic logic to this agreement.

Vrinda Sahai: Where do you see the major hurdles and friction points in implementation?

Nicolas Köhler-Suzuki: Several friction points come to mind. First, automobiles. When the deal was announced, share prices of Indian automakers dropped 1 to 4 percent. You have a 250,000-vehicle quota at 10 percent duty, slowly phased in, and it is a significant competitive shock for SUVs purely made in India. Japanese and Korean manufacturers who have built factories in India will lobby ferociously, and if the backlash from them is severe enough, India could find creative administrative ways to slow implementation through non-tariff measures, homologation requirements, safety testing, and so on. Second, Carbon Border Adjustment Mechanism. The charges will increase over time and expand to cover more downstream products. Every year, Indian exporters will have a concrete figure they can point to as the EU giving with one hand and taking with another. Third, the sustainability chapter during ratification. Members of European Parliament from certain groups and environmental NGOs will scrutinize the trade and sustainable development provisions with zeal. If India’s carbon emissions continue to rise dramatically, the European Parliament will face pressure to condition ratification. Fourth, data adequacy. India has not received a data adequacy decision under General Data Protection Regulation and is not anywhere close to getting one. Without that, every Indian IT company processing European personal data must rely on standard contractual clauses, adding cost, complexity, and legal uncertainty. The services chapter is operating with one arm tied behind its back. Fifth, on mobility. Immigration policy remains a national competence of member states, and we are in a period where anti-immigration sentiment is vote-winning for far-right parties. Asking governments to issue fast-track work permits for Indian IT professionals is asking far-right governments to take a political risk that many will not want to take.