German Chancellor Friedrich Merz said Monday that the European Union and India could conclude a landmark free trade agreement by the end of January, a move that could significantly lower barriers for EU wine exports to the Indian market.
Speaking after meeting Indian Prime Minister Narendra Modi in the western Indian city of Ahmedabad, Merz told reporters that if negotiations are completed on schedule, several senior EU leaders would travel to India to formally sign the agreement.
“If the negotiations are finalised within the agreed timeframe, we expect EU leaders to come to India to put the finishing touches on this agreement,” Merz said, according to Reuters.
In a separate report, the European Commission President and António Costa are expected to travel to India on Jan. 27 to sign the agreement with Indian Prime Minister Narendra Modi.
Brussels has already confirmed that certain agricultural products, including dairy and sugar, will be excluded from the talks. Even so, Sabine Weyand, the EU’s top trade official, said Brussels has reached an agreement with New Delhi to reduce India’s 150% federal tariffs on European wine and spirits. However, she did not disclose the scale of the reductions.
Brussels has already confirmed that certain agricultural products, including dairy and sugar, will be excluded from the talks. Even so, Sabine Weyand, the EU’s top trade official, said Brussels has reached an agreement with New Delhi to reduce India’s 150% federal tariffs on European wine and spirits. However, she did not disclose the scale of the reductions.
The comments follow a series of high-level talks aimed at accelerating negotiations that have stretched on for more than a decade. On Jan. 8 and 9, India’s Minister of Commerce and Industry Piyush Goyal visited Brussels, holding intensive discussions with the EU’s Trade and Economic Security Commissioner Maros Šefčovič.
During those meetings, both sides instructed their negotiating teams to speed up efforts to resolve remaining differences and bring the talks to a conclusion, signalling that negotiations have entered a final phase.
Goyal later said in a post on social media platform X that the discussions covered key areas of the proposed agreement and reaffirmed both sides’ commitment to a rules-based trading system.
“We reaffirmed our commitment to a rules-based trading framework and a modern economic partnership that safeguards the interests of farmers and MSMEs while integrating Indian industries into global supply chains,” Goyal wrote.
India, with a population of about 1.4 billion, is the world’s most populous country and a major trading partner of the European Union. The EU is currently India’s largest trading partner in goods. Official data show bilateral trade between India and the EU reached US$137.5 billion in the 2023–24 fiscal year, nearly 90% higher than a decade earlier.
Despite that growth, efforts to finalise an EU–India free trade agreement have long stalled. Negotiations began around 2007 but have repeatedly run aground over issues including data protection, intellectual property rights and market access. High tariffs on automobiles, steel, wine and spirits, as well as disagreements over services trade and regulatory standards, have been among the most contentious points.
In the wine sector, India’s tariff regime remains one of the world’s most restrictive. Imported wine faces federal duties of up to 150%, with additional state-level taxes imposed by individual Indian states. The combined tax burden is significantly higher than in other large markets, including China, sharply raising the cost of entry for foreign wine producers.
Recent trade agreements suggest, however, that India may be willing to ease those barriers. Last month, India concluded free trade negotiations with New Zealand as we have reported, agreeing to grant tariff reductions on 95% of New Zealand exports. Under that agreement, India committed to gradually reducing wine import duties from 150% to either 25% or 50% over a 10-year period, depending on the declared price of the wine.
An earlier agreement, the Australia–India Economic Cooperation and Trade Agreement (ECTA), has already produced measurable results. Under ECTA, Australian wines priced above US$15 now face an import duty of 75%, with rates scheduled to fall further to 25% by 2032. Wines priced between US$5 and US$15 saw duties cut to 100% in 2022, with a planned reduction to 50% by 2032.
Australian wine exports have been among the first to benefit. Data from India’s Ministry of Commerce and Industry, Government of India show that between January and October 2025, India imported 1,586,216 litres of wine from Australia, valued at US$5.39 million. Import volumes rose 66% from a year earlier, while import value increased 62.23%, making Australia the largest wine supplier to India by both volume and value during the period.
If the EU and India reach a similar agreement, major European wine-producing countries such as France, Italy and Spain could see expanded access to the Indian market.
At a broader level, India is increasingly viewed as one of the world’s most promising consumer markets. The country is the fastest-growing economy in the Group of 20 and has recently overtaken Japan to become the world’s fourth-largest economy. Multiple forecasts suggest India could become the world’s third-largest economy by 2030, with gross domestic product reaching about US$7 trillion and a middle-class population exceeding 700 million.
According to data released by India’s Ministry of Commerce and Industry, the country imported 8,615,299 litres of wine between January and October 2025, valued at US$22.18 million. Import volumes surged 151% year on year, while import value rose 9.7%, a gap that reflects a rapid increase in shipments of lower-priced, entry-level wines.
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