EU Calls For Investment Liberalisation Chapter In India–EU FTA

The European Union has urged India and the EU to consider adding an investment liberalisation chapter to their Free Trade Agreement (FTA) when it comes up for review, saying it would strengthen long-term economic ties and encourage greater private sector participation.

Speaking at a Federation of European Business in India (FEBI) meeting, Hervé Delphin said the current agreement, concluded on January 27, 2026, does not include provisions for investment liberalisation in non-services sectors. He suggested that this gap should be addressed during the review process, expected two years after the FTA enters into force, likely in early 2027.

He added that discussions on investment liberalisation are already underway, noting that European companies are actively investing in India and many more are looking to expand or enter the market.

Alongside this, the EU has also pushed for early conclusion of an Investment Protection Agreement (IPA), which aims to reduce non-commercial risks such as sudden regulatory changes and political uncertainty, while ensuring fair treatment for investors.

The proposed investment liberalisation framework would guarantee national treatment and Most Favoured Nation (MFN) status for investors, while also preventing restrictive conditions such as local content requirements and export-linked obligations.

According to EU estimates, more than 6,000 European companies operate in India, generating around 3.7 million direct jobs and contributing nearly US$ 220 billion in turnover in 2024, equivalent to about 5% of India’s GDP and a significant share of its manufacturing output. Indian firms have also invested approximately $40 billion in Europe, while European investments in India stand at about $140 billion.

Hervé Delphin also called for the swift conclusion of negotiations on a Geographical Indications (GI) agreement, which would help protect iconic products such as Darjeeling tea and Roquefort cheese.

Officials noted that the FTA is currently undergoing legal scrubbing, expected to be completed by July, followed by translation into EU languages. It will then require approval from the European Council and the European Parliament before final signing.

The agreement has been structured as an exclusive trade pact, meaning it requires approval only from the European Parliament rather than all EU member state legislatures, potentially speeding up the ratification process.