India, EU set to conclude Free Trade Deal by Jan 27

India and the European Union are expected to announce the conclusion of Free Trade Agreement (FTA) negotiations by January 27, sources told CNBC-TV18, paving the way for a major expansion of bilateral trade.

EU leaders are expected to meet Prime Minister Narendra Modi at the time.

Indian commerce minister Piyush Goyal have earlier called this the "mother of all deals" when he indicated the same date for completing deal negotiation.

Following the announcement, both sides will finalise the legal text

of the FTA. The deal will then need approval from the European Parliament and a decision from the EU Council, before being formally signed by the European Commission and India. Officials aim to complete signing and ratification by 2026.

Negotiators have struck a balance on sensitive areas with agriculture and dairy sectors respecting both sides’ red lines, while the EU has agreed to provide greater market access for Indian labour-intensive exports.

Discussions are ongoing about automobile trade. EU car exports to India will fall under a tariff reduction quota, with rates phased by fuel type and vehicle segment. Discussions on exact quotas and tariff levels are ongoing.

Meanwhile, EU wines and spirits, that now risks 200% tariff from the US, are set to gain improved access to the Indian market.

On climate policy, the EU will maintain its Carbon Border Adjustment Mechanism (CBAM) -- the bloc's policy that ensures imported goods face the same carbon cost as EU products -- but has committed to support Indian firms in their decarbonisation efforts. 

In addition to trade measures, India and the EU are expected to sign a Memorandum of Understanding (MoU) on mobility of professionals, facilitating easier movement for skilled workers. The EU also plans a major outreach exercise post-FTA to accelerate trade relations.

Also Read: Piyush Goyal: India-EU FTA will be the ‘mother of all deals’; No EU member opposes