India–EU Trade Talks Resume: New Emphasis on Digital Trade & Green Goods

India and the European Union have formally renewed negotiations on the long-pending Bilateral Trade and Investment Agreement (BTIA), reflecting a mutual need to deepen economic cooperation in an era shaped by digital globalisation and climate-linked trade rules. After nearly a decade of limited progress, both sides are now approaching the dialogue with a more focused agenda: aligning digital trade frameworks, negotiating green-goods access, and managing the implications of the EU’s Carbon Border Adjustment Mechanism (CBAM).

A key point of contention is digital trade regulation. The EU favours an open, cross-border data-flow environment supported by strong privacy laws such as the GDPR. India, however, maintains a data-sovereignty and localisation framework aimed at safeguarding national security, consumer rights, and domestic digital innovation. Balancing these approaches is essential because digital services—IT, fintech, e-commerce, and cloud infrastructure—contribute significantly to India’s exports. India’s stance emphasises policy space, while the EU seeks predictable rules that reduce compliance costs for its companies.

On the environmental front, the implementation of the CBAM has emerged as a critical issue. The mechanism imposes carbon-based tariffs on imports like steel, aluminium, and cement, areas where India has strong export potential. India argues that the policy creates a non-tariff barrier and disproportionately impacts developing economies still transitioning toward low-carbon infrastructure. New Delhi is therefore pushing for transitional exemptions, capacity-building support, or mutual recognition of India’s carbon-certification systems. For the EU, CBAM is central to its climate agenda and internal political commitments under the European Green Deal.

The negotiations also extend to intellectual property (IP) protections, labour standards, sustainable supply chains, and renewable-energy cooperation. The EU is seeking higher commitments to ensure ethical production and stronger IP enforcement, while India is cautious about obligations that might restrict affordable access to technology or complicate MSME compliance.

Despite the complexities, progress may be possible through sector-specific partnerships. Areas such as critical minerals, semiconductor value chains, green hydrogen cooperation, and digital-payments interoperability offer pathways for incremental breakthroughs even if the full BTIA remains challenging.