Despite the progress, some deep divides remain.<\/p>\n
For Europe, intellectual property protection is a major area of concern. It is seeking better data protection and tighter patent norms.<\/p>\n
For India, a new carbon tax known as CBAM (Carbon Border Adjustment Mechanism) imposed by Europe starting this year is a major fault line in the discussions.<\/p>\n
The CBAM “effectively acts as a new border charge on Indian exports, even if import duties are eliminated under the FTA”, says Srivastava of GTRI. “This is particularly damaging for MSMEs [micro, small and medium-size industries], which face high compliance costs, complex reporting requirements and the risk of being penalised using inflated default emissions values.”<\/p>\n
Whether the agreement ultimately becomes a “growth-enabling partnership or a strategically asymmetric deal” will depend on how these final issues are resolved, says Srivastava.<\/p>\n
But in the longer run it will be a win-win, say analysts.<\/p>\n
“Ultimately it could expedite trade decoupling from the US and other unreliable partners. It will mean reducing dependencies on Trump’s America – or China for that matter – reducing vulnerabilities to on-again, off-again tariffs, export controls and the general weaponisation of supply chains,” says Alex Capri of the National University of Singapore.<\/p>\n
According to Capri, India’s high carbon emissions and concerns over its human rights record have led to some pushback against the deal in Europe. But India’s reduction of the purchase of Russian crude oil from November 2025 could help its smooth passage in the EU parliament, whose approval will be required for the pact to become effective, say analysts. <\/p>\n
“Political friction with the US since early 2026 means that EU leaders will now be more welcoming towards this trade deal than they would have otherwise been,” says Dasgupta.<\/p>\n
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