EU-India relations facing potential strain amidst the recent Russia sanctions?
The EU-India free trade agreement (FTA) negotiations, ongoing since August 2025, are moving forward with a goal to conclude by the end of the year [1][3]. Both parties have agreed on a two-stage approach, aiming to finalize areas of convergence in the first phase, followed by tackling more sensitive issues later.
However, the negotiations face several hurdles. The stringent EU food safety and sanitary regulations, which are stricter than World Health Organization norms, impact Indian agricultural exports such as coffee, tea, spices, and rice, causing frequent rejections and limiting export growth [3]. The EU’s Carbon Border Adjustment Mechanism, viewed by India as unfair and burdensome for developing economies and MSMEs, is another point of contention [3]. Data security concerns and disagreements over automobiles and wine duties also pose challenges [3][4].
Despite these challenges, the EU remains committed to a commercially meaningful agreement that opens markets for goods and services, reflecting the strategic importance of this partnership [1][4].
Meanwhile, US tariffs and sanctions on India are exerting indirect pressure on the trade dynamics. The US recently imposed additional tariffs of up to 50% on Indian imports, including an extra 25% duty on Indian imports of Russian crude oil, aiming partly to restrict India’s trade with Russia amid the Russia-Ukraine conflict [2][5]. These US tariffs have contributed to delays and uncertainties in India-US trade negotiations and increased India's interest in diversifying trade partnerships, including accelerating FTA talks with the Eurasian Economic Union and others [2].
Contrary to speculation, there is no direct evidence that EU sanctions are currently in place against India or significantly affecting EU-India FTA talks. The EU has maintained a cooperative and strategic approach toward India, focusing on mutual market access and sustainability issues rather than imposing sanctions [1][3][4].
The EU's designation of Nayara Energy, an Indian refinery partly owned by Russian energy giant Rosneft, is largely symbolic and unlikely to significantly impact India's energy trade or EU-bound exports [6]. However, if India were to reduce purchases of Russian oil to avoid US tariffs, it could reduce a key Russian revenue stream for Moscow's war effort, aligning with EU and Ukrainian interests [7].
Experts suggest that the US imposing tariffs of up to 50% on Indian goods poses a far greater challenge than the impact of the EU's sanctions. The bigger pressure on India right now is coming from the United States. The threat of high US tariffs on Indian goods could strengthen the mutual interest between the EU and India in finalizing a free trade agreement.
The overall momentum towards a EU-India trade agreement remains resilient, and the year could still culminate in a breakthrough if shifting geopolitical dynamics bring New Delhi and Brussels closer together. India now needs a deal with the EU more than it did when it had arguably better ties with the US. The EU has taken a more measured approach during trade negotiations, particularly in the agricultural sector which employs close to 44% of India's population [8].
Removing Russian oil from the global supply could lead to a spike in prices, hurting everyone, not just Russia. The EU's approach towards India during the negotiations reflects its strategic importance and its commitment to a mutually beneficial agreement. The year 2025 could mark a significant turning point in the EU-India trade relations.
References:
[1] "EU-India Free Trade Agreement (FTA) negotiations: An update." European Union Delegation to India. August 2025.
[2] "US tariffs on Indian goods: Implications and responses." Indian Ministry of Commerce and Industry. August 2025.
[3] "EU-India FTA: Key negotiation hurdles and potential solutions." Indian Council for Research on International Economic Relations. August 2025.
[4] "EU-India FTA: A strategic partnership for the 21st century." European Commission. August 2025.
[5] "US imposes 50% tariffs on Indian imports, including Russian crude oil." Wall Street Journal. August 2025.
[6] "EU sanctions Nayara Energy: Implications and analysis." The Diplomat. August 2025.
[7] "India's potential reduction of Russian oil purchases: Geopolitical implications." Chatham House. August 2025.
[8] "EU's measured approach towards India in agricultural sector: Analysis." The Hindu. August 2025.
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