India-EU free-trade pact likely this month – German chancellor 

An agreement is necessary to unlock the full potential of economic ties between Germany and India, Friedrich Merz has said.

Germany is hopeful that a trade deal between India and the European Union can be reached by the end of this month, Chancellor Friedrich Merz has said.

European Commission President Ursula von der Leyen and European Council President Antonio Costa plan to travel to India at the end of January.

Merz said an EU-India deal was necessary to unlock the full potential of bilateral trade between New Delhi and Berlin, which now stands at $50 billion.

“We must not and do not want to leave this opportunity unused,” the chancellor said on Monday, after talks with Indian Prime Minister Narendra Modi in Ahmedabad, referring to the proposed trade deal.

❗️PM Modi & Chancellor Merz Fly Kites At Sabarmati Riverfront, Ahmedabad pic.twitter.com/T1S0Bkkj0W

— RT_India (@RT_India_news) January 12, 2026

Last week, the EU signed a deal with the Mercosur bloc of South American countries after negotiations spanning more than 25 years. Merz called that deal an encouraging sign as talks between India and the EU for a trade deal have been ongoing for 18 years.

On his first visit to an Asian country, Merz held talks with Modi. The two countries signed various agreements to enhance cooperation in the defense sector, skill development, health and education, as both nations seek to reduce dependence on China and bolster economic ties.

India signed three free-trade pacts last year and is in negotiations with a dozen countries or trade blocs.

New Delhi is seeking to diversify from its largest trading partner and export market, the US, which slapped a 50% tariff on the South Asian nation. Half of the amount was a punitive levy for India’s purchases of Russian oil.

Trade negotiations between the US and India will resume tomorrow, the US ambassador-designate said on Monday.