India and Europe are almost half of the “chapters” trade agreement

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India and the EU have reached a consensus on almost half of the subjects which will be covered by a trade agreement that they hope to seal this year and have agreed that the pact will not cover certain “sensitive” agricultural products such as dairy products, according to people knowing the talks.

The people declared that the negotiators had accepted eight out of approximately 20 “chapters”, each covering subjects such as rules of origin or intellectual property rights, after the EU in February intensified their efforts to strengthen economic ties with the fifth world economy.

Food progress hope that an agreement between New Delhi and Brussels can help compensate for part of the impact on trade in both parties of the prices imposed or threatened by US President Donald Trump, while the exclusion of dairy products will be a great relief for Indian farmers and milk processors.

“The wait is that we conclude an agreement in December; a lot of work goes to this end,” said a person familiar with India’s position on talks, who asked not to be identified.

“Good progress has been made” thanks to “the momentum that resumed in the last two laps” of negotiations in New Delhi and Brussels, added the person.

Indian Prime Minister Narendra Modi and the president of the European Commission Ursula von der Leyen agreed in New Delhi in February to put pressure to conclude the trade agreement this year. The Indian Minister of Commerce, Piyush Goyal, met on Monday the commercial commissioner of the EU Maroš Šefčovič in Paris.

Olof Gill, EU trade spokesperson, said the work had intensified and “progressed at all levels”. A 12th cycle of negotiations was expected in early July, he said, while “in-depth commitments continue in the meantime”.

People with knowledge of the most recent talks in Brussels last month said that the problems resolved so far were mainly in less controversial areas such as customs and the facilitation of exchanges and significant ignition points remained.

New Delhi has since independence in 1947 has retained pricing walls raised around agriculture, which employs almost half of the most populous country in the world.

The government of Modi, which has been shaken by mass agricultural demonstrations in recent years, seeks to maintain its significant levies on dairy products and other agricultural imports in current talks with the United States.

“There are certain political sensitivities linked to certain products and these sensitivities must be taken care of,” said one of the people familiar with India talks with the EU.

A senior European official involved in negotiations said that “dairy products overall” were a “no” area.

“We have defined a perimeter for what could be a significant free trade in the interests of the parties and milk is not part of it,” said the manager.

India is the largest producer of milk in the world, with a production of 211 million tonnes produced in 2024-25, mainly 15 million small farmers, according to the government.

The country imported dairy products to “reasonable rights” of 30 to 60%, said Rupinder Singh Sodhi, president of the Indian Dairy Association, a group of lobbies. “India does not need dairy products from the outside.”

People close to negotiations in Brussels and New Delhi said Rice had also been excluded from negotiations.

Indian officials have declared in private that any EU concession would partly reflect other recent commercial pacts. In an agreement with the United Kingdom last month, India agreed to reduce samples from alcoholic spirits, cars, textiles and engineering products. Dairy products were also mainly excluded from negotiations with the United Kingdom.

The EU is not satisfied with the access that India offers for cars and spirits, products which, according to Indian trade officials, could be among the last to be discussed.

The EU now wanted to speak of “an economically significant access to the market,” said an official in Brussels.

According to Indian officials, another discord is the adjustment mechanism of the carbon border, under which the EU plans to collect prices compared to next year.

India has already denounced the mechanism, which is intended to penalize the carbon emitted in the production of imported products such as cement, fertilizers, iron and steel and chemicals.

One of the people familiar with negotiations in New Delhi said that CBAM “would have a negative effect on trade” because it could strike the heavy industry of India. “Everything is on the cards in terms of which we should, together, solve this problem”, India potentially pushing the postponement of CBAM, said the person.