India-EU Free Trade Talks Kick Off Amid Trump Tariff Threat; GDP Growth May Dip 0.50%, Gold-Silver Prices Hit All-Time High

Strategic Alliance Aims to Counter Global Trade Pressures

Introduction

Bhopal: India and the European Union (EU) have initiated the 14th round of negotiations for a comprehensive Free Trade Agreement (FTA) on September 9, 2025, in New Delhi. This move comes amid escalating global trade tensions, particularly due to US President Donald Trump’s recent imposition of tariffs, which could reduce India’s GDP growth by 0.50%. Simultaneously, gold and silver prices have surged to all-time highs, reflecting economic uncertainties.

Trade Talks and Objectives

The talks, led by Commerce Minister Piyush Goyal and EU Trade Commissioner Maros Sefcovic, aim to finalize the FTA by year-end, targeting a $135 billion bilateral trade volume. Key issues include resolving disputes over rules of origin, market access for agricultural products like wine and dairy, and non-tariff barriers. The EU seeks reduced duties on automobiles and medical devices, while India pushes for better access for textiles and pharmaceuticals. This strategic alliance is seen as a buffer against US tariffs, which have strained India-US trade relations.

Economic Impact of Trump Tariffs

Analysts warn that Trump’s 50% tariff on Indian goods, effective since August 2025, could shave off 0.50% from India’s projected 7% GDP growth, impacting exports worth billions. The move, linked to India’s oil trade with Russia, has prompted India to diversify trade partnerships, with the EU being a critical ally.

Surge in Gold and Silver Prices

Gold prices hit ₹1,10,290 per 10 grams, and silver reached ₹1,30,000 per kilogram, driven by safe-haven demand amid tariff fears and a weakening rupee.

Conclusion

The India-EU FTA could mitigate tariff impacts, fostering economic resilience, though its success hinges on swift negotiations and global stability.