Hindustan Aeronautics, BEL, Bharat Dynamics: Defence stocks in the spotlight ahead of India-EU Summit next week; latest updates you must know

The stocks are expected to hog the limelight, as Kaja Kallas, the EU High Representative for Foreign Affairs and Security Policy and the Vice-President of the European Commission, in her post on X on Monday, said that Europe is ready to deliver on a powerful new agenda with India.

"Today, the EU agreed to move forward with the signature of a new Security and Defence Partnership," Kallas said.

"It will expand our cooperation in areas such as maritime security, counterterrorism and cyberdefence. I look forward to signing it next week during the EU-India Summit in New Delhi," Kallas added.

India-EU Summit

India and the European Union are set to announce the conclusion of a free trade agreement, the firming up of a defence partnership pact and a framework for the mobility of Indian professionals at the summit talks next week, news agency PTI reported earlier this week, citing their diplomatic sources.

European Council President Antonio Costa and European Commission President Ursula von der Leyen will be the chief guests at the Republic Day celebrations on January 26, and the India-EU summit will be held the next day.

A military contingent from the EU, featuring the military staff flag and flags of Operations Atalanta and Aspides, the naval operations of the grouping, will feature at the Republic Day parade.

It will be the EU's first participation in such an event outside of Europe, the PTI report added.

Pressing global challenges, including the Russia-Ukraine war, the situation in the Middle East and the political developments in Venezuela, will be among the global issues that the two sides are likely to delve into at the summit, the report added.

The EU leaders will be accompanied by a 90-member delegation that will include foreign and security policy chief Kaja Kallas, trade commissioner Maros Sefcovic and director generals handling trade, energy and industrial policy.

The European Union is India's biggest trade partner, with bilateral trade in goods at $135 billion in the financial year 2023-24.

The free trade agreement is expected to significantly enhance trade ties.

Strategic Vision for 2026-2030

India and the EU are also expected to unveil a joint comprehensive strategic vision that will govern their relationship for the period 2026-2030.

The PTI sources said both sides are still holding negotiations to find common ground on contentious issues like CBAM (Carbon Border Adjustment Mechanism), which is a framework for tariffs on carbon-intensive products such as steel and cement.

The EU has a principled position on CBAM and has not changed the provisions for the US and other partners, the sources said, adding both sides are working on a "compromise solution" on this sensitive issue.

Defence Partnership

The SDP will bring interoperability in the defence domain, and it will open up avenues for Indian firms to participate in the EU's SAFE (Security Action for Europe) programme.

SAFE is the EU's Euro 150 billion financial instrument designed to provide financial support to member states to speed up defence readiness.

At the summit, India and the EU are also set to launch the negotiations for a Security of Information Agreement (SOIA).

The SOIA is expected to boost industrial defence cooperation between the two sides.