European Commission President Ursula von der Leyen and European Council President António Costa will visit India from 25-27 January for the 16th EU-India Summit and the country’s Republic Day parade. Their visit, and the potential conclusion of a trade deal and other agreements, will be a defining moment for EU–India relations.
The EU–India Summit can be seen as part of both parties’ broader efforts to diversify and deepen relations with likeminded countries amid pressure from the Trump administration, which has embraced tariffs even against key partners. India has been slapped with 50 per cent tariffs, with additional tariffs threatened over its purchase of Russian crude oil. The US has also previously threatened Europe with tariffs, most recently over Greenland.
In this context, an EU–India trade deal signals both parties’ continued commitment to trade liberalization. For Brussels, it follows the recently concluded trade deal with the South American trade bloc Mercosur, and a string of agreements with several Asian countries. For New Delhi, it follows agreements with the UK in 2025 and the European Free Trade Association (EFTA, comprising Switzerland, Norway, Iceland and Liechtenstein) in 2024. A deal with the EU – India’s leading trading partner – will be the culmination of these efforts.
While trade negotiations have taken years, the EU–India relationship is finding newfound urgency as the US challenges the rules-based international order. As Europe clings to a value-driven foreign policy, India is seen as a potentially ideal partner given its credentials as the world’s largest democracy. In contrast, the narrative that India and the US are ‘natural allies’ has become less salient in Washington as the Trump administration pursues a more transactional and value-neutral foreign policy.
The EU sees India as a key partner in its efforts to de-risk supply-chains, particularly in critical and emerging technologies. The EU–India Trade and Technology Council (TTC) held its first meeting in 2023, while in October, the European Council endorsed a ‘New Strategic EU–India Agenda’ that pledged to deepen cooperation across multiple areas. A security and defence partnership and initiatives on skilled migration and economic security are also expected to be signed during the EU–India Summit.
Deals have also come alongside regular senior government interactions. For example, Indian External Affairs Minister S. Jaishankar attended the ‘Weimar Triangle’ format meeting with Germany, France and Poland earlier this month. Prime Minister Narendra Modi is also scheduled to visit the continent later this year for the India-Nordic Summit.
Sticking points in trade negotiations
Notwithstanding this progress, there are several underlying fault lines in the EU–India relationship. This is most evident in the drawn-out negotiations for the trade deal, which began in 2007 and resumed in 2022 after stalling in 2013. A deadline to conclude a deal by the end of 2025 was missed.
Both sides consider the other’s protectionist proclivities as contributing to delays. Market access and agriculture remain key sticking points for the EU (as they do for India–US trade negotiations). Meanwhile, New Delhi views Brussels’ EU Carbon Border Adjustment Mechanism as a form of green protectionism.
The negotiations have come down to the wire: Indian Commerce Minister Piyush Goyal visited Brussels this month as both sides seek to conclude the deal in time for the EU–India Summit. Getting the deal over the line will entail kicking the can down the road on some of the more politically sensitive issues, such as agriculture.
Divergence over Russia and China
Broader strategic considerations also hang over the EU–India relationship. Ostensibly, Brussels and New Delhi share similar worldviews as they seek to preserve their strategic autonomy in a world of renewed great power competition and assertiveness. Both are secondary players relative to their geographic counterparts: the EU to the US in the Atlantic, and India to China in the Indo-Pacific. This provides strategic rationale for deepening their engagement as a means of gaining leverage in relations with the US and China.
However, Brussels and New Delhi’s divergent relations with other major powers is also a source of friction. In particular, India’s relationship with Russia has raised concerns in European capitals amid the ongoing war in Ukraine. European countries have generally been understanding of India’s strategic needs, including its reliance on Russian military hardware and its energy-hungry and price-sensitive economy, which accounts for New Delhi’s heavy dependence of discounted Russian crude oil.
However, as the Ukraine war has dragged on, Europe’s scrutiny of the India–Russia relationship has grown. India is reportedly the second-largest provider of restricted critical technologies to Russia (after China). The latest EU sanctions package in October included three Indian entities.
This scrutiny will continue, particularly if New Delhi’s actions are seen to enable Moscow to prolong the conflict. New Delhi has presented itself as ‘on the side of peace’ and maintained relations with both Kyiv and Moscow, with Prime Minister Modi visiting Ukraine in August 2024, a month after he visited Russia.