India-EU free trade talks stall over autos and steel

India and the European Union have delayed concluding their long-negotiated free trade agreement, with talks now expected to extend into next month and a narrower deal likely focused on resolving disputes over automobiles, steel, and EU carbon border tax rules.

• Key negotiation issues include the EU push to expand its ~80,000-car reduced-duty export quota to India, India’s demand to lower tariffs on steel exports to Europe, and greater flexibility on EU carbon border tax rules that New Delhi argues could disadvantage Indian producers; EU trade chief Maros Sefcovic recently visited India, and both sides aim to finalize talks by the next EU-India summit and potentially announce a deal during Ursula von der Leyen’s January visit to New Delhi.
• The talks, ongoing for nearly two decades, gained urgency after U.S. President Donald Trump imposed 50% tariffs on Indian goods, prompting India to seek alternative markets via accelerated negotiations with New Zealand, Chile, Peru, and Oman, the conclusion of a trade deal with the United Kingdom in July removing tariffs on products including cars and alcohol, while the EU simultaneously pursues diversification away from the U.S. and China and struggles to conclude its long-running Mercosur (Argentina, Brazil, Uruguay, Paraguay) trade agreement by year-end.