Thailand and India Race to Clinch EU Trade Deals Amid Trump Tariff Fears

Thailand and India are locked in a parallel push to secure Free Trade Agreements (FTAs) with the European Union (EU) by the end of this year, driven by a shared desire to unlock new markets and mitigate the risks of escalating global trade tensions, particularly those stemming from potential future tariffs imposed by a returning US administration.

FTAs, designed to lower trade barriers and streamline commerce, are a key focus for Thailand, which currently has 16 such deals with 23 countries. The most recent addition was an agreement with Bhutan, signed earlier this month.

However, several other FTA negotiations are being fast-tracked, most notably the one with the 29-nation EU. Thailand's ambitious target is to conclude these talks by Christmas Day, aiming to boost its access to European markets and hedge against the fallout of a potential resurgence of aggressive US trade policies.

This urgency follows the previous US administration's move to implement reciprocal tariffs on imports to address trade imbalances, a policy that could see Thai goods facing a hefty 36% levy.

India shares Thailand's determination to finalise an FTA with the EU within the same timeframe. According to reports from the Thai Department of International Trade Promotion, negotiations between India and the EU, which have spanned nearly two decades, are now believed to be nearing a successful conclusion.
 

European Commission president Ursula von der Leyen and Indian Prime Minister Narendra Modi have publicly stated their intention to wrap up discussions within the next nine months.

Von der Leyen hailed the prospective agreement as potentially "the biggest FTA ever established," echoing Modi's commitment to "step up our efforts with the aim of concluding this agreement this year." Modi himself has instructed his negotiating team to prioritise reaching a mutually beneficial deal with the EU by the year's end.

This renewed impetus marks a significant shift for negotiations that had previously seemed to have stalled. The prospect of a return to power in the US by the individual who previously held the presidency has reportedly injected a sense of urgency into the process for both India and the EU, fuelling fears of renewed trade friction with Washington and creating strong pressure to finalise the FTA.

In a pre-meeting address to Modi, Von der Leyen painted a picture of a worsening global landscape, one she believes is drawing India and Europe closer together as both grapple with significant geopolitical and geoeconomic challenges.

The European Commission notes that the EU is already India's largest trading partner, with bilateral trade reaching €124 billion in 2023, a 90% increase over the past decade. Approximately 6,000 EU companies operate in India.
 

"But we can do so much better if we remove market access restrictions and trade barriers," Von der Leyen asserted.

A European Parliament study from 2020 estimated that an FTA could boost EU exports to India by over 50% and Indian exports to Europe by around a third.

For Thailand, Commerce Minister Pichai Naripthaphan confirmed that the sixth round of FTA negotiations with the EU is scheduled to take place in Thailand between June 23rd and 27th, 2025.

The European Commissioner has indicated a strong willingness to work closely with Thailand to conclude the talks by December 25th, 2025, in a move that would benefit both sides economically and in terms of trade and investment.

"Given the current global geopolitical situation, coupled with the US's tariff announcements affecting various countries, including Thailand, and concerns about the potential impact on future global trade, Thailand and the EU agree that a reliable and predictable trade partnership is essential. This underscores the increasing importance of accelerating the Thailand-EU FTA negotiations," Pichai stated.

This flurry of diplomatic activity highlights the shared ambition of both Thailand and India to secure these crucial trade deals by the end of the year. The question remains as to which nation will cross the finish line first.

Vuttikrai Leewiraphan, permanent secretary of the Ministry of Commerce and chair of the US Trade Policy Working Group, stressed that Thailand must urgently finalise its ongoing FTA negotiations and simultaneously explore new potential markets in the Middle East, Latin America, and Africa, echoing calls from the Thai National Shippers' Council for the government to leverage FTAs with key trading partners to diversify trade risks and expand into new markets.