Spain's Albares says India-EU on cusp of trade deal, plan stronger defence ties

• The India-EU trade deal would surpass the EU-Mercosur agreement to become the world's largest free trade zone, covering approximately 2 billion consumers
• Spain's foreign minister stated there are no expected obstacles to completing the agreement, emphasizing the EU's commitment to free trade and economic security
• EU Commission President von der Leyen is expected in India early next week to finalize negotiations for the historic trade agreement

Summary

Key Development:

India and the European Union are on the verge of concluding a historic free trade agreement within the next few days, according to Spanish Foreign Minister José Manuel Albares following meetings in New Delhi on January 21. The minister expressed confidence that negotiations are proceeding smoothly with no anticipated obstacles.

Strategic Significance:

European Commission President Ursula von der Leyen is expected to arrive in India early next week to finalize the deal, which would create a massive market of 2 billion consumers. This agreement would surpass the EU-Mercosur deal to become the world's largest free trade zone.

Market Implications:

Albares emphasized the deal's importance as a signal of the EU's commitment to free trade and economic security. He stated the bloc needs to demonstrate its belief in free trade while maintaining "instruments of dissuasion to protect ourselves from any economic coercion," suggesting a strategic balancing act between openness and protectionism.

Geopolitical Context:

The agreement comes amid broader European concerns about a changing international order, with ECB President Christine Lagarde separately calling for a "deep review" of the European economy to face new global challenges.

Companies and Sectors:

While specific sectors weren't detailed, the comprehensive trade deal would impact virtually all industries across both regions, affecting approximately 2 billion consumers combined from India's 1.4 billion population and the EU's 450 million citizens.

The timing suggests urgency in finalizing the agreement, potentially reflecting both regions' desire to strengthen economic partnerships amid global trade uncertainties.