India, EU target year-end free trade pact to boost partnership, innovation

India and the European Union are pushing to seal a comprehensive Free Trade Agreement (FTA) by the end of this year, with both sides stressing that the pact will be fair, balanced and growth-oriented. According to a PIB report, Union Commerce and Industry Minister Piyush Goyal told the annual session of the Automotive Component Manufacturers Association (ACMA) on Thursday that the agreement would create new opportunities for businesses and consumers while strengthening long-term economic ties.

Negotiations gaining momentum

Goyal underlined that the India-EU talks are progressing with sincerity and commitment, adding that while every negotiation requires "give and take", the direction is "extremely positive". He said the deal will boost trade, investment, technology transfer and collaboration across industries.

The minister noted that the auto component sector which has consistently backed India's manufacturing and export push, stands to gain from the pact. He said joint ventures, technology tie-ups and collaborative research with European partners would help Indian companies innovate, reduce costs and create jobs.

EU calls talks unprecedented

Maroš Šefčovič, EU Commissioner for Trade and Economic Security, described the ongoing negotiations as "some of the most intensive and constructive" between the two partners. He said the process has reached an unprecedented level of trust and seriousness and reaffirmed the shared goal of concluding the agreement by year-end, in line with the commitment made earlier by Prime Minister Narendra Modi and European Commission President Ursula von der Leyen.

Šefčovič emphasised that the FTA is being designed as a win-win arrangement, balancing the interests of producers, exporters and consumers. He added that India's growing role as a global economic engine and Europe's technology and scale could create a strong partnership for sustainable growth and innovation.

GST cuts bring relief to auto sector

Goyal also highlighted recent GST reforms, calling them a "landmark relief" for the automobile and agriculture sectors. The government has cut the GST on most auto components from 28 per cent to 18 per cent, while the rate on tractors has been reduced to 5 per cent.

He said the changes will make spare parts more affordable, boost demand, support formalisation and generate jobs across the value chain. Calling it the "biggest reform since Independence", Goyal said the benefits would reach every citizen in the country.

Auto industry's role in make in India

Marking a decade of the 'Make in India' initiative, Goyal credited the automobile industry as its "torchbearer". He said rising vehicle penetration—from the current 34 cars per 1,000 people-would open further opportunities for the auto component sector, both in domestic and global markets.

The minister recalled India's resilience during the Covid-19 pandemic, noting that the country supplied medicines and vaccines to more than 100 nations, many of them free of cost. He said this strengthened India's reputation as a reliable global partner. Goyal concluded his remarks by urging industry leaders to remain bold and forward-looking. Quoting Ratan Tata, he said: "Take the stones people throw at you and build a monument." He stressed that the sector, supported by government reforms and international partnerships, must harness resilience and innovation to drive India's next phase of growth.