Trade negotiators from India and the European Union have tempered expectations of concluding a long-awaited free trade agreement by the end of the year, as talks remain deadlocked over several critical issues, Bloomberg News reported on Friday, citing sources familiar with the discussions.
According to the report, one major sticking point is the automobile sector. The European Union is pressing India to expand its current quota of around 80,000 cars that EU manufacturers can export to India under a reduced tariff regime. New Delhi, however, has so far been cautious, citing concerns over the impact on its domestic auto industry.
Steel trade has also emerged as a contentious area. India is seeking a reduction in duties on certain steel products exported to the EU, arguing that existing measures restrict market access. In addition, New Delhi is pushing for greater flexibility in the EU’s proposed carbon border tax rules, which could affect Indian exporters under the bloc’s climate policies.
The developments signal a slowdown in momentum for the ambitious trade pact, which both sides have touted as a strategic priority amid shifting global supply chains. Neither the Indian government nor the European Commission has officially commented on the latest report.