The EU’s latest strategy document on India, issued this week, marks a definitive moment in the evolution of Delhi’s relations with Brussels, long defined by mutual neglect. This had begun to change in the 21st century, but the two sides had struggled to boost the partnership quickly. In the last few years, there has been a determined effort by Brussels and Delhi to plug the gap between the promise of the partnership and its performance. Troubled by the assertion of Russia, the muscular economic policies of China, and the disruption of historic US alliances by President Donald Trump, Europe is in the middle of rebooting relationships with other powers. Its latest outreach to India is part of that effort. Framed as a “comprehensive strategic agenda” to deepen, broaden, and better coordinate cooperation, the EU strategy is a blend of ambition and pragmatism. In stating that “India’s success benefits the EU, just as the EU’s success benefits India,” Brussels has moved from treating New Delhi as a useful interlocutor to recognising it as an indispensable partner in shaping the international order.
The EU is the second most important commercial partner of India, after the US. Bilateral goods trade has climbed to €120 billion and services to €60 billion. Yet, India still accounts for less than 2.5 per cent of the EU’s total trade. The EU, therefore, focuses on securing a far-reaching Free Trade Agreement with India that reduces tariff and non-tariff barriers and unlocks the enormous possibility of trade and investment flows between Europe and India. After years of drift, India is now equally committed to an early conclusion of the FTA. Buffeted by a massive and persistent trade deficit with China, and shocked by Trump’s exorbitant tariffs, India sees free trade with the EU as a major strategic objective now. The EU also frames India as a rapidly expanding manufacturing and technology hub hosting nearly half of global capability centres; India appreciates Europe’s edge in research, regulation and green and digital technologies. Together, they could gain from EU-India Innovation Hubs, a Startup Partnership, and joint work in AI, semiconductors, and outer space.
