EU-India’s Commitment to a Strategic Relationship: Now or Never?

The European Union (EU) is coming to terms with the reality of a radically new geopolitical environment. The speech by the U.S. Vice President J.D. Vance at the Munich Security Conference, followed by U.S.-Russia talks on Ukraine-held with neither Kyiv nor Brussels present-has been a stark wake-up call for Europeans. The U.S. joined Russia, Belarus, Hungary and North Korea in voting against a Europe-backed Ukrainian UNGA resolution calling for the immediate withdrawal of Russian troops from Ukraine on the third anniversary of the 2022 Russian invasion. The Trump II administration’s reversal in foreign policy comes as a reality check for the EU: the era of unquestioned transatlantic overall strategic unity is over, in an increasingly obvious transactional world order. Consolidating new partnerships with emerging powers is no longer a recreational and creative affair for the EU but rather an imperative-India tops the list of the Global South’s lifeline to the EU. 

But what about New Delhi? Prime Minister Narendra Modi has just returned from a convivial visit to President Donald Trump, being the fourth world leader to visit upon him taking office in January 2025. This goes on to show India’s enduring "special relationship" with Washington, not one without uncertainty, nevertheless. Long-term challenges remain on trade tariffs and illegal immigration while the strategic, technological and defence-related aspect of the relationship continues to thrive in its new form through the Framework for the India-U.S. Major Defense Partnership in the 21st Century.

It is pretty much the inverse picture for the EU-India relationship: trade remains the bulwark of the relationship with the EU as India’s top trade partner in goods in 2023 over the U.S. and China. In parallel, the EU and leading Member States such as France or Germany, among others, have signed Migration and Mobility Partnership Agreements (MMPAs) with India to facilitate legal migration while challenging irregular migration. Let’s not forget that India has the largest diaspora consisting of 32 million people worldwide. Yet it is the strategic dimension of the EU-India partnership that is wavering: the creation of the Trade and Technology Council (TTC) in 2022 that followed with a Memorandum of Understanding (MoU) on semiconductors signed in September 2023 has thus far not sufficed to revamp strategic cooperation in the critical and emerging technologies (CETs) realm, as well as in areas such as digital connectivity and resilient value chains.

It is no secret that, for both the EU and the U.S., India’s regional and global influence is largely valued for its potential as a counterweight to China. However, New Delhi’s technological, defense, and energy ties with Russia and Iran remain key points of contention. There are increasing EU sanctions on Indian firms among those enabling the sanction circumvention of Russia while supporting its military-industrial complex; the U.S. had already set the precedent. While the EU may still appear to need New Delhi more than New Delhi needs Brussels, the unpredictability of the Trump administration, coupled with its threats of tariff action against imports of Indian goods, logically enhances the strategic value of the EU in India’s eyes. Moreover, the U.S. administration, already under Biden’s presidency, has been more prolific than the EU in sanctioning Indian companies over their ties with Russia, but the trend may accelerate under the Trump administration that has already started to sanction Indian companies trading and transporting Iranian crude oil and petroleum products. This creates some space that the EU may be able to use to its advantage.

Whether tangible progress will be made during Ursula von der Leyen’s high-level visit or official EU-India bilateral talks scheduled for the end of 2025 remains unclear, but the example of the European Free Trade Association (EFTA)-India Trade and Economic Partnership Agreement (TEPA) signed in March 2024 after 21 rounds of negotiation, could pave the way. The EU-Mercosur deal signed in December 2024 is another recent success story twenty-five years later. The EU seeks a Comprehensive Agreement while India needs Foreign Direct Investment (FDI). Yet, the India-Australia and India-UAE trade deals lacked chapters on investment. As a consequence, there is perhaps a feasible way of sequencing the components of the EU-India trade deal while revamping the EU-India TTC in parallel. 

The EU must raise the stakes of its engagement-not only does this require an elevated strategic partnership but also for the EU to be willing to take more risks in terms of sharing technology with India, much like the U.S. is doing. There are currently French, German, Spanish and Italian companies negotiating deals in defence co-production with New Delhi. Should Brussels not seize this moment-especially when the EU itself must demonstrate its commitment to joint defense spending and procurement?

It is not all about weapons and defence, however. Key sectors such as green technology and knowledge transfer in digital public infrastructure development offer significant potential for joint strategic collaboration and development. The EU Global Gateway has yet limited band width in India and South Asia, broadly. Yet India and Bhutan are the only two countries in the region that have not signed an MoU with China on the Belt and Road Initiative (BRI). 

Copyright image : Evan Vucci / POOL / AFP
India's Prime Minister Narendra Modi with European Commission President Ursula von Der Leyen ahead of the G20 Leaders' Summit at the Bharat Mandapam in New Delhi on September 9, 2023.