India will finalize a "mutually beneficial" free trade deal with the European Union by the end of this year, Prime Minister Narendra Modi said Friday after meeting with EU chief Ursula von der Leyen.
"We have asked our teams to work out a mutually beneficial bilateral free trade agreement by the end of this year," Modi said in New Delhi.
Von der Leyen, who is on a two-day visit to India with her college of commissioners, is seeking to hedge against souring relations with the United States and said they were "expecting a lot from our trade negotiators".
Deeper access to India's rapidly expanding market was at the top of the delegation's agenda, and the EU chief looked visibly pleased after her meeting with Modi and his ministers, AFP reported.
The EU is already India's largest trading partner, accounting for 124 billion euros ($130 billion) worth of trade in goods in 2023 -- more than 12 percent of total Indian trade, according to Brussels.
The Indian market offers many opportunities for sectors ranging from defense to agriculture, cars and clean energy. Yet, protected by high tariffs, it currently accounts for only 2.2 percent of EU trade in goods.
"We have tasked our teams to build on this momentum and finalize our FTA before the end of the year," von der Leyen said in a statement after the meeting.
Standing beside Modi, the EU chief added: "We told them they should surprise us".
The bloc is pushing for a trade deal that lowers entry barriers for its cars, spirits, wines and other products.
India meanwhile hopes for higher EU investments in areas such as clean energy, urban infrastructure and water management.
New Delhi is also pushing for easier mobility for its skilled workforce and higher investments for ventures in India.
Von der Leyen's visit, billed as the first of its kind to the world's fifth-largest economy, comes days after US President Donald Trump announced a slew of tariffs against both friends and foes.
