India and the European Union (EU) should consider expanding their Free Trade Agreement (FTA) and add to it a chapter on investment liberalisation when they revisit the pact in two years after it comes into force, EU Ambassador to India Herve Delphin said Thursday.
“This FTA doesn’t have a chapter on investment liberalisation in non-services sectors.
Hopefully, the EU and India should revisit this area two years down the road after the entry into force of the FTA, as envisaged in the review clause,” he said at a meeting of Federation of European Business in India (FEBI).
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“We are working on that (investment liberalisation),” additional secretary in the Department of Commerce and chief negotiator for India-EU FTA said. The FTA that was concluded on January 27, 2026 is likely to be operationalised in early 2027.
Liberalisation and Protection
Other than investment liberalisation, Delphin also said that both sides should promptly conclude the ongoing negotiations on Investment Protection Agreement (IPA).
The primary role of investment protection agreements is to mitigate non-commercial risks, such as political instability or sudden regulatory shifts. Investment liberalization chapters in an FTA ensure national treatment to the investors. They also get Most Favoured Nation (MFN) treatment which ensures that FTA partners receive the same “best” treatment given to investors from any other country. They also prevent host governments from imposing specific conditions on an investment, such as local content requirements or export balancing that restricts imports by linking them to export volume.
European companies here in India are already investing in India. They are ready to do more.
European companies not yet present in India want to come and are ready also to invest more.
Economic Footprint
The investment liberalisation chapter would give a boost and encouragement to the private sector, he said.
There are over 6,000 European firms in India creating more than 3.7 million direct jobs and 2 million indirect jobs. These companies generated $ 220 billion in turnover in 2024, equivalent to around 5% of India’s GDP and nearly a quarter of its manufacturing sector turnover, a report Economic Footprint of European Business in India by FEBI said.
In Europe there are 1500 Indian companies operating. Total investments by European countries in India stands at $ 140 billion while Indian companies have invested $ 40 billion.
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“To complete the picture, we should also swiftly conclude negotiations on the third agreement launched in parallel with the FTA and IPA, which is the Agreement on Geographical Indications (GI). And be sure that we also give a boost to trade by ensuring proper protection of Indian and EU’s iconic products, whether Darjeeling tea or Roquefort cheese,” Delphin said.
At present the legal scrubbing of the agreement is in progress which is expected to be completed by July, Jain said. After that it will be translated in different languages of the EU member nations.
After the legal text is ready, the agreement has to be approved by the European Council that is composed of heads of state or government of EU countries before signing. After signing the European Parliament will vote on it.
India-EU FTA has been intentionally designed as an “exclusive” agreement as it covers only trade matters. The exclusive agreement only requires approval by the European Parliament and not by Parliaments of all 27 member states.
TOPICSEuropean UnionThis article was first uploaded on May seven, twenty twenty-six, at thirteen minutes past ten in the night.