The partnership between India and the European Union (EU) is increasingly driven by global trade uncertainty, linked to US tariff policies and changing power dynamics, an expert told DW.
Biswajit Dhar, professor emeritus at the Council for Social Development in New Delhi, said the past year of disruptions in international trade has highlighted the need for predictable and stable trading partners.
“Global trade rules have been thrown into the air,” Dhar said, adding that “in this scenario, it has become important for India and the EU to look towards each other, not only to safeguard bilateral trade, but also to expand it.”
He urged New Delhi and Brussels to play a leading role in reviving multilateral institutions such as the World Trade Organization.
Furthermore, emphasizing cooperation with other like-minded countries, he said that “the multilateral system still offers the best long-term guarantee for fair and predictable trade.”
The EU is already India’s largest trading partner and provides a more coherent policy environment than that in Washington, where changing tariff decisions have increased costs and risks.
“U.S. pressure actually pushed countries to make these types of deals,” Dhar said. “Trade with the U.S. has become unpredictable and difficult, which is why India and the EU have finally moved faster after years of stalled negotiations.”
The two sides had been in talks for nearly two decades before recent progress.
And despite political differences, especially in India-Russia relations, Dhar says, “India and the EU have not targeted each other and tried to gain short-term benefits. In fact, these geopolitical issues are a matter of long-term strategy of different countries.”
He said Europe understands where India is coming from. The EU would therefore ultimately like India to reduce its dependence on Russia. But India would need time to achieve this, if at all.
Dhar believes that the EU has taken a tolerant approach on all these issues compared to the US, which he says “has kept hammering away”.
While optimistic about the deal’s potential, Dhar warned that future disagreements could arise over environmental standards and the EU carbon border tax (CBAM), which could affect some Indian industries.
“Market access will improve on both sides,” he said, “but how measures on carbon emissions, labor standards and sustainability are implemented will determine how this partnership develops.”
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