German Chancellor Friedrich Merz indicated that the European Union and India might sign a free trade agreement as early as the end of January, following his meeting with Indian Prime Minister Narendra Modi on Monday.
Merz said that the presidents of the European Commission and European Council would travel to India to formalise the agreement if it is finalised by then. During his first trip to India as chancellor, he added:
“In any case, they will take another major step forward to ensure that this free trade agreement comes into being.”
Negotiations had initially been expected to conclude by the end of 2025, but German officials said intensive talks between Merz and Modi raised hopes of an agreement being signed at the end of January. Indian Trade Minister Piyush Goyal also noted that the deal was in its final stages.
Protectionism and strategic cooperation
Merz warned that the world is experiencing “a renaissance of unfortunate protectionism” that negatively affects Germany and India, without naming specific countries. He cited U.S. tariffs on Indian energy imports and Chinese export controls on key minerals and semiconductors as examples of disruptions that have impacted German industry.
For the EU, a deal with India would follow its recent agreement with South America’s Mercosur bloc and would strengthen its trade networks while reducing reliance on China. Germany also aims to cooperate more closely with India on security issues to lessen its dependence on Russia.
Agreements on minerals, health and AI
In addition to the trade talks, Germany and India signed memorandums of understanding on critical minerals, the health sector and an artificial intelligence innovation centre. Modi said the agreements “will give new momentum and strength to our cooperation.”
India continues to rely heavily on Russia for military equipment and energy, making it one of the largest buyers of Russian oil and gas. Germany has pressed India to prevent companies from bypassing sanctions on Russia and to reduce energy imports, but India has so far resisted these demands.
