Opinion EU and India, on a strong footing

In terms of both its nature and timing, the European Union President Ursula von der Leyen’s visit to India last week was a pivotal moment for bilateral relations as well as the larger dynamic among the world’s major powers. Well before the disruption of the global order was begun by the election of Donald Trump as US president for the second time, von der Leyen had decided to put India at the top of destinations outside Europe in her own second term that began last summer. Having decided to give relations with Delhi a high priority, von der Leyen arrived in India with 22 of her 27 cabinet colleagues (or the College of Commissioners) for an intense, and broad-based round of consultations between the two governments at the highest level. The return of Trump to the White House and the crisis in trans-Atlantic relations marked by the US outreach to Russia at the expense of Ukraine and Europe provided an unprecedented geopolitical context for the rebooting of ties between India and Europe.

India was among the first countries to establish diplomatic ties with the Brussels-headquartered European Economic Community (the EU’s predecessor) back in 1963. But the relations between the two never took off. As India drifted close to the Soviet Union during the Cold War and turned inwards economically, there was little room for productive engagement between Delhi and Brussels. The early 1990s that saw the collapse of the Soviet Union and India’s own economic reforms offered a more hopeful setting for the partnership between India and the more ambitious European Union that replaced the EEC. Delhi and Brussels unveiled a strategic partnership in 2004 and launched free trade talks in 2007. Although trade and economic cooperation expanded, a free trade treaty remained elusive and the talks were broken off in 2013 by the EU, and the strategic partnership remained only in name. The NDA government sought to revive political and economic partnership with the EU and renewed trade talks in 2022.

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If the pressures on the global economic order and the renewed great power conflict put a new premium on India’s EU partnership over the last few years, the Trump disruption in the historic US ties to Europe in the last few weeks added a new dimension of urgency. Prime Minister Narendra Modi and von der Leyen were fully cognisant of the new imperatives and set out an expansive agenda in the areas of economy, security, technology, and connectivity. None of it is more important than the ambition of concluding a free trade agreement within this year. Given the challenges of mounting trade deficits with China and the unpredictability of Trump’s economic policies, Delhi and Brussels can no longer dither in upgrading their trade relations. The trade bureaucracies of the two sides have a reputation for being difficult interlocutors. Success in concluding an India-EU FTA would depend on the willingness of PM Modi and President von der Leyen to sustain pressure on their respective bureaucracies to bring the negotiations to an early conclusion. What is at stake is not merely bilateral trade relationship but the geopolitical standing of India and Europe in the rapidly changing structure of great power relations.