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Speaking on Monday during a trip to India, German Chancellor Friedrich Merz said European Commission President Ursula von der Leyen and European Council President Antonio Costa could sign a free trade deal with New Delhi by the end of the month.
Merz’s comments came days after the majority of EU member states supported the Mercosur free trade agreementa deal strongly backed by Germany as part of the bloc’s strategy to diversify its trade ties beyond the United States and China – two countries that have pursued strongly nationalist trade policies over the past year.
“Unfortunately, we are witnessing a revival of protectionism. It is directed against the principles of free trade and open markets,” Merz told a news conference, adding that European leaders could visit India “towards the end of this month” to sign a free trade agreement.
“No matter what, they will take another big step forward to ensure that this free trade agreement is implemented,” he said.
The idea of holding an EU-India summit by the end of January was floated in Brussels as negotiations intensified late last year, although the initial goal of striking a deal by the end of 2025 ultimately came to nothing.
In his remarks encouraging a timely deal, Merz called India “the fastest growing economy in the G20” and described it as a “critical partner in the Indo-Pacific.”
EU trade agenda fuels unrest in France
Last week, Indian Trade and Industry Minister Piyush Goyal visited Brussels to continue high-level negotiations with EU trade chief Maroš Šefčovič, who last year called Indian negotiators “tough.”
India and the EU face growing trade problems with the United States, which has increased tariffs on its trading partners, and with China, which is increasingly trying to weaponize other countries’ dependence on raw materials and technology.
But negotiations on the sustainability chapter proved difficult, the Commission told European lawmakers last Septemberparticularly with regard to the introduction of a dispute resolution mechanism linked to green standards.
The EU’s carbon border adjustment mechanism, adopted in 2023, is also a particular sticking point for India.
Merz nevertheless expressed confidence in the final stretch of the negotiations, stressing that the signing of the agreement would be “an encouraging sign on the path to the continued development and conclusion of free trade agreements”.
The EU’s diversification agenda is fueling political unrest in France, the bloc’s second-largest economy after Germany, which opposed the Mercosur deal over fears that French farmers’ livelihoods would be endangered by an influx of Latin American imports.
With von der Leyen expected to travel to Paraguay to sign the Mercosur deal on January 17, as first reported by Euronews, tensions have increased between French President Emmanuel Macron and the political opposition, with far-right and far-left parties calling for his government to be subjected to a vote of no confidence.
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