German Chancellor Friedrich Merz has indicated that a European Union-India free trade agreement could be finalized by the end of January 2026, stating that negotiations are "close to completion" following productive discussions with Indian Prime Minister Narendra Modi. This potential agreement, if settled, would represent the EU's most substantial trade pact with a major emerging economy in over a decade, aligning with the EU's strategic objective to broaden commercial ties beyond China and bolster supply chain resilience. The EU's trade figures with India are already robust, with goods trade valued at €120 billion in 2024, making India the EU's ninth-largest trading partner. Negotiations for the current FTA began in June 2022, building on earlier talks that started in 2007 and stalled in 2013. Merz also voiced concerns about rising global protectionism during his visit, linking the trade deal to the broader international trade climate. The potential finalization of the deal by month's end has led to high expectations among German government sources, with the Indian Trade Minister Piyush Goyal confirming the agreement is in its final stages. The EU is also set to finalize a deal with the Mercosur bloc, further signaling its intent to create new trade networks amidst evolving global trade dynamics. Additionally, Germany seeks to deepen security cooperation with India, aiming to reduce India's reliance on Russia. India and Germany have signed Memoranda of Understanding covering critical minerals, the health sector, and an artificial intelligence innovation center, underscoring a broader strategic partnership.