The world this week | India’s trade talks with US, EU on track, thorny issues remain; Saudi-Pak security pact raises eyebrows

Pakistan’s Defence Minister Khawaja Mohammad Asif said his country’s nuclear programme “will be made available” to Saudi Arabia, if needed, under the Strategic Mutual Defense Agreement (SMDA) signed on Wednesday (September 17).

Notably, the defence pact came just eight days after Israeli strikes in Qatar and underscored the growing security concern in the region, specifically in view of Israel’s growing offensive. 

India said it was aware of the development, but murmurs of discontent can be heard in New Delhi, primarily on two fronts: first, the possibility that Pakistan could extract diplomatic, if not material, support from Saudi Arabia in a future conflict with India; second, concerns about the extent to which the SMDA influences Saudi and broader Arab behaviour towards India-Pakistan crises. 

However, analysts argue that since the agreement lacks specific commitments, it may not be credible enough to influence radical change and deter regional adversaries of either country. 

Details of the agreement are also not made public. A joint statement issued after the meeting read, “The agreement states that any aggression against either country shall be considered an aggression against both”.

Pakistan’s defence cooperation with Saudi Arabia dates back to the 1960s, when Pakistani troops went to Saudi Arabia amid concerns about Egypt’s war in Yemen, and has evolved over the years. 

In comparison, New Delhi’s defence partnership with Riyadh is nascent. But in recent months, the India-Saudi partnership has featured sufficient investment, evident in new joint defense exercises, and new institutional avenues of cooperation such as the Ministerial Committee on Defence Cooperation established in April 2025.

New strategic EU-India agenda 

While India’s defence partnership with Saudi Arabia continues to evolve, New Delhi is simultaneously deepening its strategic engagement with the European Union (EU). India and the EU have decided to elevate their relationship to a new level by deepening partnership across critical areas, as they aim to finalise a Free Trade Agreement (FTA) by the end of this year.

The EU has adopted a ‘New Strategic EU-India Agenda’, which outlined its strategic vision for enhancing cooperation with New Delhi. Although the two sides underlined the areas of common interest, they have yet to work through some contentious issues. What are those areas of interest and points of friction?

Where India, EU see eye-to-eye

— The two sides seek to tap significant potential in trade and investment and strengthen commercial ties, particularly by finalising the FTA. 

— India eyes investment commitments from the EU in broad-based sectors. The EU has expressed its interest in scaling up investments in India through ‘Global Gateway’.

— Amid shifting geopolitical realities, the new strategic agenda underscores commitment to diversifying supply chains and strengthening regional connectivity initiatives, such as the India-Middle East-Europe Economic Corridor.

— The European Commission’s joint statement also outlined the launch of negotiations for a Security of Information Agreement to facilitate closer security and defence cooperation on the Indo-Pacific, addressing hybrid threats, space security, shadow fleets, and sanctions.

— It also emphasised promoting critical emerging technologies and engagement on digital issues, with particular attention to strengthening economic security within the Trade and Technology Council.

Points of difference 

— India has to address one of the top demands of the EU – access to the Indian automobile and alcoholic beverage sectors. After India gave limited quota access to the UK’s automobiles and whiskey, the EU will likely seek more ambitious opening as it competes with the UK in similar product categories.

— Agriculture, services and non-tariff measures are some other points of further negotiations. India has flagged non-tariff measures, such as the ones related to safety, packaging and environmental norms, which its exporters face in agriculture and fisheries sectors in the European market. 

— India is also seeking to improve its pharma exports to the EU, which currently take a long time to get approved.

— Moreover, the EU’s Carbon Border Adjustment Mechanism, slated to become effective on January 1, 2026, has also been a concern for India, as it would potentially affect a range of sectors like steel, cement, and automobiles.

— In a report to the European Parliament on Wednesday, the European Commission also noted that India’s high tariffs and internal measures that restrict import competition and limit foreign direct investment also constrain business opportunities on both sides.

— Most importantly, the EU has pointed out that India’s participation in Russian military exercises and its purchase of Russian oil stand in the way of closer ties. Delhi, on its part, has reiterated its commitment to an early and peaceful resolution of the Russia-Ukraine war.

India-US trade talks back on track

India’s purchases of oil from Russia have emerged as a point of friction, prompting the US to impose an additional 25 per cent tariffs on Indian exports and temporarily stall trade talks between the two sides. 

As Indian exporters hope that the finalisation of the deal with the EU will bring relief, particularly for the labour-intensive sectors such as textiles, footwear, and fisheries, which are largely affected by the steep US tariffs, India-US trade talks are finally said to be back on track.

A team of officials led by Commerce Minister Piyush Goyal is expected to visit Washington next week to resume negotiations for the trade deal, two officials aware of the development told The Indian Express on Friday (September 19).

Earlier this week, the US team, led by Assistant US Trade Representative (USTR) for South and Central Asia, Brendan Lynch, held “positive” discussions with his Indian counterpart in New Delhi. The two sides “decided to intensify efforts to achieve early conclusion of a mutually beneficial trade agreement”.

Although India and the US are now expected to launch the sixth round of negotiations, they have yet to iron out differences over some areas, primarily over the red lines India has drawn around agriculture and dairy, and its purchases of Russian oil.  

Notably, Indian exporters have said they expect the government to sign a trade deal without compromising on the red lines, while India has also emphasised that these concerns need to be recognised to reach a resolution. 

However, it’s noted that with reconciliatory voices from both sides, a possible solution going forward could be India stepping up purchasing energy from the US while maintaining its imports from Russia, according to sources in New Delhi.

It must be noted here that the US also said that it received  “commitments” from G7 countries to increase sanctions pressure on Russian oil buyers (China and India are the top buyers of Russian oil) after it asked the group for the same. 

US withdraws Chabahar waiver, revokes visas over fentanyl 

At the same time, the US has withdrawn the sanctions waiver granted to the Chabahar port in Iran, which is being developed by India. On Thursday (September 18), the US embassy in Delhi also said it has revoked and denied visas to some “business executives and corporate leadership” based on their alleged involvement in trafficking fentanyl precursors.

While the withdrawal of the 2018 sanctions waiver from the Chabahar port is part of the US’s maximum pressure on Iran, this is seen as a major setback for India’s plans to develop the strategically-located port, close to the Chinese-developed Gwadar port in Pakistan.

Along with Iran, India has been developing the port (Shahid Beheshti Terminal, Chabahar Port) in accessing Afghanistan and Central Asia. The sanctions regime on the port will come into effect from September 29. 

On the other hand, cracking down on the illegal import of fentanyl, US President Donald Trump on Wednesday (September 17) named India, China, Afghanistan and Pakistan among 23 major drug transit or major illicit drug-producing countries. 

Fentanyl and other synthetic opioids remain the most lethal drugs trafficked into the US, causing more than 52,000 US deaths in a 12-month period ending in October 2024, a US intelligence report had said earlier this year.

Trump and Xi hold talks on TikTok, other issues

Meanwhile, US President Trump and Chinese President Xi Jinping discussed the future of TikTok’s operations in America, alongside fentanyl, trade, and the Russia-Ukraine war, during a phone call on Friday (September 19), the first in three months.  

Although Trump said Xi approved a deal on the future of TikTok’s US operations, it has yet to be confirmed by China. Xinhua, China’s official state news agency, simply quoted Xi as saying that Beijing “welcomes negotiations over TikTok”.

TikTok is run by Chinese firm ByteDance and was previously told it had to sell its US operations or risk being shut down. 

Trump and Xi agreed to hold further talks on the sidelines of the Asia-Pacific Economic Cooperation forum that starts on October 31 in Gyeongju, South Korea. Trump also said he would visit China early next year and that Xi would come to the U.S. at a later date. Reuters previously reported that the two sides were planning such a meeting.

US vetoes Gaza ceasefire resolution 

As Israel intensified its offensive by launching ground operations in Gaza City this week, the US once again vetoed a UN Security Council resolution that had demanded an immediate and permanent ceasefire in Gaza and the release of Israeli hostages.

The UN resolution described the humanitarian situation in Gaza as “catastrophic” and called on Israel to lift all restrictions on the delivery of aid to the 2.1 million Palestinians in the territory, The Associated Press reported.

The resolution came amid the annual gathering of world leaders at the UN General Assembly, where Gaza is a major topic of discussion, with key US allies expected to recognise an independent Palestinian state. 

However, the debate about statehood would barely bring any relief to Palestinians at this point in time, as they face Israel’s ground offensive in Gaza City, in which over 40 were reported to be killed. 

In the meantime, a UN commission of inquiry says Israel has committed genocide against Palestinians in Gaza. The report, which cites statements by Israeli leaders,  and the pattern of conduct by Israeli forces, says there are reasonable grounds to conclude that four of the five genocidal acts defined under international law have been carried out since the start of the war with Hamas in 2023, BBC reported.

As Israel further escalates its attack on Gaza, Al Jazeera reported at least 51 people were killed, including 43 in Gaza City. The Palestinian Civil Defence says nearly half of Gaza City’s population, or about 450,000 people, have fled the area since Israel launched its major operation there in August, it added.

UN chief Antonio Guterres says Gaza is experiencing the “worst level of death and destruction” he has seen in his lifetime and calls on the international community not to be “intimidated” by Israel.

Israel’s war on Gaza has killed at least 65,141 people and wounded 165,925 since October 2023. Thousands more are believed to be buried under the rubble. A total of 1,139 people were killed in Israel during the October 7 attacks, and about 200 were taken captive.

Send your feedback and ideas to ashiya.parveen@indianexpress.com.