Recent shifts in the West have underscored the European Union's need for a stronger partnership with India.
With U.S. President Donald Trump threatening a 25% tariff on European imports and China’s economic expansion reshaping global trade, Europe faces a pivotal moment.
Forging closer ties with India presents the EU with an opportunity to safeguard its economic and strategic interests amid growing global uncertainty.
The importance of this partnership is reflected in European Commission President Ursula von der Leyen’s two-day visit to India, starting Thursday, accompanied by a high-level EU delegation.
During the visit, meetings with Indian Prime Minister Narendra Modi and key ministers will mark a significant step towards strengthening EU-India relations.
How the EU-India Partnership Can Be Mutually Beneficial
Trade has long been the cornerstone of EU-India relations, with the EU serving as India’s largest trading partner. In 2024, bilateral trade in goods surged to nearly $126 billion—an impressive 90% increase over the past decade.
India’s rapidly expanding economy, expected to become the world’s third-largest by 2030, offers significant opportunities for European businesses seeking growth.
For the EU, India is both a key export destination and a vital supplier of goods. European industries, particularly in automobiles, wines, and spirits, view India as an essential market amid rising global protectionism. Meanwhile, India’s “Make in India” initiative and ambitions to become a manufacturing hub create new avenues for European investment and trade diversification.
On the other hand, India sees the EU as a crucial partner in reducing its dependence on China. European expertise in technology, infrastructure, and investment can help drive India’s development goals, including its “Developed India” (Viksit Bharat) vision and the ambitious target of increasing total exports to $2 trillion by 2030.
Despite strong economic incentives, challenges persist. Trade negotiations have been ongoing for nearly two decades without a final free trade agreement. Regulatory hurdles, intellectual property issues, and bureaucratic complexities continue to slow progress. However, both sides recognize the need to overcome these barriers to fully realize the potential of their economic partnership.
Common Ground Between the EU and India
Beyond trade, the EU and India share strategic interests, particularly in the Indo-Pacific. Concerns over China's growing influence, cyber threats, and maritime security challenges have driven the EU to deepen its engagement in the region.
India, with its expanding naval capabilities and strategic alliances, plays a pivotal role in ensuring regional stability.
Established in 2022, the EU-India Trade and Technology Council (TTC) provides a framework for cooperation in key areas such as artificial intelligence, cybersecurity, digital governance, and green technologies. The TTC aims to enhance supply chain resilience, economic security, and technological collaboration—crucial priorities for both partners amid global uncertainties.
Another key initiative highlighting India’s strategic significance to Europe is the India-Middle East-Europe Economic Corridor (IMEC). This project seeks to improve connectivity between India and Europe through the Gulf states, Israel, and Jordan, offering an alternative to traditional trade routes like the Suez Canal. The EU views this corridor as a vital step toward diversifying supply chains and reducing strategic vulnerabilities.
Is India the Key to Power Balance in an Uncertain World?
The European Union's growing focus on India is shaped by global political dynamics. The ongoing conflict in Ukraine has strained EU-Russia relations, while India’s neutral stance has positioned it as a potential mediator.
Despite India's longstanding ties with Russia, the EU has opted for engagement over isolation, acknowledging India’s rising geopolitical influence.
While differences persist—particularly regarding India's economic relations with Russia—Brussels recognizes India's commitment to a multi-alignment strategy. Instead of pressuring India to cut ties with Russia, the EU is exploring avenues for collaboration on shared priorities, such as securing critical mineral supply chains and advancing defense partnerships.
Additionally, India's leadership in the Global South presents opportunities for trilateral cooperation. Its engagement with African and Latin American nations, particularly in digital transformation and infrastructure, aligns with Europe’s foreign economic agenda. The EU views India as a strategic link to these regions, opening doors for investment and collaboration.
However, the success of this partnership will depend on both sides’ ability to translate rhetoric into concrete action. From concluding the long-pending trade agreement to strengthening regional security cooperation, the coming years will be pivotal in shaping EU-India relations.
Comments