In times of Trump, what India, EU can offer each other

Arc of the ties

Bilateral relations between India and the EU date back to 1962, when India became one of the first countries to establish diplomatic relations with the European Economic Community, the precursor of the EU.

Today, with the US acting difficult, the EU is positioning itself as India’s reliable friend and partner.

This is the first time that the EU leadership will attend the Republic Day Parade as Chief Guests. At the summit that follows, three major outcomes are expected — pacts on trade, security and defence, and mobility.

Since February last year, after the College of Commissioners’ visit, India and the European Union have worked towards an ambitious and strategic roadmap for the ties to take off. And, to give a solid foundation, the EU came out with its strategic agenda document in September last year.

Why India and European Union need each other

India has value for the EU as the world’s largest democracy and fastest-growing major economy. With over one billion people of working age and a median age of 31, India is set to become the world’s third-largest economy by 2030. A rapidly expanding manufacturing and technology hub, it hosts 45% of global capability centres and invests heavily in frontier technologies.

For India, the EU can be a dependable ally in the Western Hemisphere. Its leaders have demonstrated an ability to talk US President Donald Trump down from strategic precipices, from Ukraine to Greenland. And, with the US leaving but a crack in the door open for Indian professionals and students, Europe is emerging as an alternative destination for ambitious Indians.

Trade and investments

The signing of the India-EU FTA is expected to be a major outcome of the visit. The FTA will create immense opportunities for growth in both economies and bring significant benefits to the youth.

The EU, as a bloc, is India’s largest trading partner in goods. For FY 2024-25, India’s total trade in goods with the EU was worth about USD 136 billion, with exports around USD 76 billion, and imports at USD 60 billion.

Around 6,000 European companies operate in India, directly employing 3 million people and supporting millions more jobs indirectly, making the EU one of India’s top investors. EU foreign direct investment in India doubled in the last five years, and Indian companies are expanding their presence in the EU, including through investments in small to medium sized enterprises (SMEs).

The EU and India are also working towards concluding an Investment Protection Agreement (IPA), a bilateral Macroeconomic Dialogue, an Agreement on Geographical Indications, and a Comprehensive Air Transport Agreement — more flights, lower air fares and better passenger convenience.

Security and defence

During the visit, a security and defence partnership agreement between India and the EU is expected to be signed. This will add further political ballast to the relationship. This will be the third country with whom the EU is signing such a partnership — Japan and South Korea being the other two in Asia.

India – EU joint naval exercises were conducted in the Indian Ocean in June 2025, the Gulf of Guinea in October 2023 and in the Gulf of Aden in June 2021. They also cooperated in escort operations for humanitarian assistance near the coast of Somalia in 2018 and 2019.

In December 2025, a delegation of the Society of Indian Defence Manufacturers visited Brussels and met the EU Commissioner for Defence and Space.

Migration & mobility

During the visit, an Agreement on Mobility Partnership between India and the EU is expected to be signed. This agreement will create new mobility pathways for skilled Indian talent to engage with the EU.

The Indian diaspora in the EU consists of approximately 1.36 million individuals, including 884,718 Non-Resident Indians (NRIs) and 478,206 Persons of Indian Origin (PIOs). The largest Indian communities in mainland Europe are in Germany (260,864), the Netherlands (228,787), and Italy (206,503).

In 2024, Indian citizens received the highest number of authorisations to reside for study, research and other activities in the EU.

In 2024, Indian professionals were the top recipients of EU blue cards, accounting for nearly 20.8% of the cards issued.

The India-EU Connectivity Partnership was launched in 2021 and focuses on transport, digital, energy networks, and flow of people, goods, services, data and capital.

An ambitious area of cooperation was the India-Middle East-Europe Economic Corridor (IMEC), which will bring great connectivity value for India. This project, however, is in limbo since the Hamas attack on Israel in October 2023 and the ensuing war.

Points of divergence

The India-EU ties have several sticking points too. The Russia-Ukraine war has been a case in point. Also, India’s human rights record has been a point of tough conversations — although it has been muted and in private in the past few years.

India would want Europe to take a much stronger position on China and Pakistan. Europe too feels the disruptive nature of dependencies on China.