As Trump takes Office, Planets Align for the EU and India
This article originally appeared in India's World.
On February 27-28, the EU Commission President Ursula von der Leyen, visited New Delhi, accompanied by twenty-two EU Commissioners. The visit of this high-powered delegation, including almost the entire college of Commissioners, was the first of its kind rolled out to any EU partner. On the program was a bilateral between Ursula von der Leyen and Prime Minister Narendra Modi, meetings between the Commissioners and their Indian ministerial counterparts, and the second meeting of the EU-India Trade and Technology Council (TTC).
The biggest deliverable of this visit was setting the agenda for a new and more strategic EU-India partnership. We saw the clearest articulation in recent years of the EU’s interest and ambitions for working with India. Speaking in New Delhi, von der Leyen stated that in the era of Great Power competition, the interests of EU and India align like never before, underlining that this is an opportune moment to “reimagine” this partnership. Furthermore, the visit underlined the role of India as an economic alternative to China – Europe’s tensions with China have been the primary impetus for reviving ties with other Indo-Pacific partners, particularly India. The Commission’s President referred to “economic coercion” and exploitation of supply chain dependencies, in a covert reference to China, and listed the ‘alternatives’ that the EU and India can offer each other.
Three New Areas for the Partnership
The visit showcased three strategic areas the EU and India will focus on going forward. First is trade and technology. Both leaders announced the ambition to conclude their Free Trade Agreement by the end of this year – which will be an uphill task. For the first time, the EU mentioned India as a partner in economic security. The Draghi report on European competitiveness recommends that the EU should focus on “increasing security and reducing dependencies.” The visit showcased the EU’s plan of working with India in critical sectors, such as batteries, pharmaceuticals, semiconductors and green hydrogen – where the EU seeks to ‘derisk’ from China and India wants to move up the supply chain. Market access and reducing barriers to trade in these sectors would be critical for both.
The Commission president also spoke of aligning industrial policies so both European and Indian industry stay competitive in view of the incoming ‘China shock.’ A host of areas were announced for the Trade and Technology Council to focus on, including greater cooperation on AI, 6G and telecom and the creation of a new space dialogue.
The second area that can transform the EU-India partnership is security and defense. Till now, EU-India security cooperation has been rather limited. Both will now focus on greater maritime security, cyber security and counter terrorism cooperation. Securing undersea cables and security of critical infrastructure were mentioned as newer areas to work on. And finally, as India seeks to diversify its defence partnerships away from Russia, defence industrial cooperation was mentioned as a new area for the partners to pursue – which could be a game changer for this partnership. The EU stated it would want an advanced security and defense partnership with India similar to the ones it has with Japan and South Korea.
The third area mentioned was connectivity and global partnerships. Europe sees India as a leading voice of the Global South and a “bridge between Indo-Pacific and Europe.” It seeks to work with India through its EUR 300 billion Global Gateway project on infrastructure projects across India and with India in third countries. The India-Middle East-Europe Economic corridor (IMEC), which will make trade between Europe and India 40 percent faster, was highlighted specifically, with the EU ready to invest in concrete projects in this corridor.
The visit of EU Commission President Von der Leyen to New Delhi signals a major shift in EU-India ties and the clearest articulation of the relationship’s importance in recent years
The overall tone of this visit focused much more on the EU’s increasingly aligning interests with India, not just values. This will help in managing and overcoming the differences in the relationship as well. India’s position on Russia, which decidedly looks more helpful to Europe in light of the US’ changing stance on Ukraine and close ties with Moscow, is one example. India’s ties with Russia did not upend ties with Europe because both Brussels and member states understood their interests of working with India despite this. Similarly, New Delhi often has questions about Europe’s ties with China and different signals coming out from various member states. Having areas, like the three outlined above, where both have a common worldview and similar assessment of challenges from China, will help keep ties on track.
The Path Forward
The timing of the visit, which comes in the middle of a fundamental shift and break in the transatlantic alliance, is crucial as the EU searches for new partners and might have to forge an Indo-Pacific policy independent of the United States. While PM Modi had a very successful visit to the United States, there are issues of concern for New Delhi as well. The US’ announcement of global reciprocal tariffs and the short timeline for an ambitious trade deal will impact India. Both Brussels and New Delhi will keenly watch the direction the US’ China policy takes. And finally US’ internal debates and legislation on technology related issues – such as export controls, reshoring, outbound and inbound investment rules as well as debates over highly skilled migration could also have an impact on both partners. For New Delhi, which is seeking to strengthen other partnerships to hedge against this uncertainty, the EU will be an increasingly important partner.
However, it is now crucial that both sides deliver on the points above, before the window of opportunity for EU and India closes. Naming the FTA as a primary deliverable of this new partnership is a risky move. India has been able to conclude light-touch, ‘early harvest’ agreements with its Western partners so far, which are qualitatively different from comprehensive EU FTAS. Even Australia struggled to finalize one with the EU, so the road ahead for India will be difficult. Similarly, connectivity projects sound good on paper, but the EU-India connectivity partnership has existed for a while without breakthroughs. And IMEC depends on the situation in the Middle East as well.
Finally, it is good to see trade, technology and economic security become one of the central planks of this partnership – crucial areas for India, where the EU has competencies. Often a challenge for New Delhi has been that strategic areas of partnership, such as security and defense, lie with member states and it is not always clear why it is important to engage Brussels. It is now critical that the Trade and Technology Council, which took more than a year to set up, does not lose momentum –especially by picking up areas which may be deprioritized in the US-India partnership by the Trump administration, such as renewable energy and green technologies.
The momentum this visit has generated should not be squandered.