The final round of talks between the two sides may take place sometime in September, Commerce Secretary S R Rao said here.
"We are in the final leg of negotiations. Hopefully, by the end of this year we should be able to conclude the deal. We have closed most of the issues," Rao said.
He was talking to reporters on the sidelines of `Open House Meet with Commerce Secretary', a programme jointly organised by Federation of Indian Export Organisations, Pharmexcil and Federation of Andhra Pradesh Chambers of Commerce and Industry.
"They want us to have a re-look at one or two issues keeping in view the distress they are facing in the EU. So we are recalibrating our approach."
An FTA would help Indian companies expand into the EU, the country's biggest trading partner and the buyer of more than 40 billion euros ($ 50.14 billion) of Indian goods and services in 2010. Europe wants access to a vast, young market of 1.2 billion potential customers. Negotiations for the proposed FTA started in 2007.
Replying to query, Rao said the Commerce Department is also negotiating with Australia and New Zealand for FTAs.
Rao said the Commerce Secretary-level talks with Pakistan, which was scheduled this month, was deferred on the request of the neighbouring country.
"Pakistan wanted postponement of the meeting. Hopefully, Commerce Secretaries of both countries would meet in September. Hopefully, there will be good agreement between India and Pakistan," Rao said.