FTA, defence & mobility 3 biggest likely outcomes from EU-India summit; EU unlikely to waive off CBAM, Paris commitment

NEW DELHI: The India-EU summit next week will see both sides announcing in an agreement that negotiations for the free trade agreement (FTA) have been successfully concluded, even though the actual signing will take place later. According to diplomatic sources, apart from the FTA, signing of a security and defence partnership to facilitate defence industrial collaboration and another agreement for mobility will be two other major outcomes from the summit that would mark the “highest point” in India-EU relations. The presidents of the European Council and European Commission, Antonio Costa and Ursula von der Leyen respectively, will arrive in India on January 25 to co-chair the 16th India-EU summit along with PM Narendra Modi. The leaders will also be the chief guests for the Republic Day parade. It is learnt that the leaders will adopt at the summit a Joint Comprehensive Strategic Agenda for 2026-2030 that’s based on the EU’s new strategic agenda for India that the 27-nation bloc released last year. The Indian side endorsed the agenda as “very positive” as it mostly aligned with Indian interests too. Ahead of the summit, it’s also learnt negotiations for the landmark FTA are still ongoing with both sides focused on ironing out differences over contentious issues like CBAM (EU’s carbon border tax) and Brussels’ insistence on having the commitment to the Paris Agreement, which both countries are signatory to, on climate change enshrined in the agreement. Sources said that while a compromise solution is likely on CBAM, the Paris treaty will also find a mention by both sides in the FTA but not in a manner that would “straitjacket” India. While the EU maintains that there cannot be an agreement without incorporating both sides’ commitment to the Paris Agreement, India’s position has been that this is a sovereignty issue and should not be mixed with trade. The formal signing of the FTA is expected after the process of legal scrubbing is completed and after it’s approved by the European Parliament. The entire process is expected to be completed this year. “The intention is that both sides will commit to speed up this process so that the entry into force of the FTA happens as quickly as possible,” said a source, speaking on condition of anonymity. While the EU is unlikely to waive off CBAM for India or any other country as the same is imposed even on its own companies, sources said it’s discussing with India what can be done to facilitate India’s own “decarbonisation”. The security and defence agreement, the second biggest outcome from the upcoming summit, is seen as a recognition of the fact that both sides look at each other as “trusting and like-minded partners” despite their differences over India’s ties with Russia.Under this new defence partnership, both sides will soon launch negotiations for a Security of Information Agreement that will facilitate the exchange of classified information and stronger cooperation in areas related to security and defence. According to the EU, this could also pave the way for India’s participation in EU security and defence initiatives in line with EU Treaty-based frameworks. While Ukraine is expected to dominate the discussions on regional and global issues, issues related to the transatlantic strife including the Trump administration’s threat to take over Greenland are also expected to come up at the summit. According to diplomatic sources, the EU is currently encouraging India to provide more humanitarian assistance to Ukraine, as Russia targets energy installations in Ukraine. “Ukraine badly needs power generators, equipment to restore power plants. Schools have already stopped functioning. At the end of the day, this is meant to hurt civilians,” said a source. The agreement on mobility is also expected to allow both sides to manage migration “sensibly”. According to the EU, this means tackling illegal flows while supporting balanced talent mobility that serves India’s development priorities and the EU’s economic needs.