Nature of the relationship · and the European Union

India’s engagement is principally with the European Union and its member states, most of them in Western Europe.

The European Union at a glance

Founders: Germany, France, Italy, Netherlands, Belgium, Luxembourg · Capital: Brussels. A supranational political-economic union of 27 member states — the world’s largest trade bloc, about a fifth of global trade.

Historical depth. Shashi Tharoor: ties reach back to the Roman Empire — Kerala’s Roman port Muziris, and a first-century-BCE Lakshmi ivory found at Pompeii.

How scholars frame it

• Christian Wagner: often called ‘natural partners’ for shared democracy, plural society and counter-terrorism; frequent summits since the 1996 Enhanced Partnership place India among a select group with Russia, the US, China, Canada and Japan.
• Rajendra K. Jain: the association is many-sided — the EU is India’s top trading partner, a large FDI source, a donor, a technology source and host to a big diaspora; India now sees it as a political player, not only a trade bloc.
• Shashi Tharoor: Indians dislike being lectured to; Europe’s tendency to preach on human rights — which India treats as a domestic matter — is a recurring irritant. David M. Malone: no part of Indian foreign policy is harder than its underwhelming tie with Europe.
• Christian Wagner also collects the sceptics’ labels — a “charade” (Jaffrelot), a “loveless arranged marriage” (Khandekar), at “risk of stagnation and political marginalization” (von Muenchow-Pohl), and marked by “friendly disinterest” (Gröning).

Why Europe matters for India

• Largest bloc and market; France and the UK are nuclear powers and P5 members; Germany is a strong UNSC-expansion candidate; four EU states sit in the G-8.
• Dhruva Jaishankar: as a single entity the EU mirrors India’s federal, multilingual structure; European states broadly share India’s liberal-democratic, secular, multicultural values; Britain and France are key defence suppliers; Europe hosts a diaspora above 1.7 million.
• Complementarity: India’s market, cost-competitiveness, services growth and demography against Europe’s technology, stability and ageing population; Europe is a source of strategic technology and gives India room to bargain with the US, Russia and China.

Cold-War era — why the partnership underperformed

• David M. Malone: India’s early encounters with Europe were rooted in maritime trade; Portuguese naval forces arrived in 1498, and four colonial powers followed over four and a half centuries. Indian forces fought under the British across both World Wars.
• Rajendra K. Jain: India took little interest in European unification early; attention came only when Britain sought Common Market membership (1961). Jawaharlal Nehru argued the EEC would deepen Cold-War divisions, widen the rich–poor gap and weaken the Commonwealth.

C. Raja Mohan on the causes of difficulty

• Seeing the continent through British eyes; alignment with the USSR skewed the view.
• Non-alignment and criticism of European alliances put Delhi out of touch with Cold-War manoeuvring.
• Western alignment with Pakistan pushed India toward Moscow, which then shaped its European lens.
• Privileged access to Eastern Europe could not be used under bloc politics.
• The East–West divide compounded by the North–South conflict; anti-colonial non-alignment left little room for strategic cooperation.
• Socialist policies constrained foreign capital and weakened commercial ties built by 1947.

The Treaty of Rome made no reference to the wider Third World; India’s bid for an Association Agreement (1961–63) was ruled out for “non-associates.”

After the Cold War · the twenty-first-century reorientation

• C. Raja Mohan: the Soviet collapse forced a rethink — India found ties with the US, Europe, China and Japan all underdeveloped. Reforms drew European interest, but Europe was far more taken with China after Deng’s reforms and found India’s pace frustrating.
• The 1993 Joint Political Statement and 1994 Cooperation Agreement are foundational; 2004 made both strategic partners — the EU has such partnerships with only five others (US, Canada, Russia, Japan, China).
• Brussels issued an India Strategy (2018) on four themes — a rules-based order, sustainable modernisation, foreign-policy coordination, and security. The EU produced its Indo-Pacific Strategy (2021), driven by Chinese assertiveness, supply-chain strain, and the 2020 signing of RCEP, which raised fears of a China-centred Asian bloc.

India’s strategy is “engaging with the USA, managing China, cultivating relations with Europe, reassuring Russia, and bringing the Japanese into active participation.”

S. Jaishankar

Once a critic of European colonialism, New Delhi is now eager to welcome Europe back into Asia; alongside the Quad it uses the West Asian I2U2 with Israel, the UAE and the US. In 2022 Modi visited Germany, Denmark and France; the Green Strategic Partnership was the standout of the Denmark leg.

Areas of cooperation

Economic — the essence of the relationship

• The EU was India’s largest trading partner in 2010 (€86 bn); by 2021 its third-largest (€88 bn goods, 10.8%), with India the EU’s 10th (2.1%). EU FDI stock in India reached €87.3 bn (2020); about 6,000 European companies provide 1.7 million direct jobs.

The two 2025–26 trade deals — CETA and the EU FTA

• India–UK CETA — concluded May 2025, signed 24 July 2025, in force 15 July 2026 (with the Double Contribution Convention). The UK removes duties on about 99% of India’s tariff lines from day one (textiles, leather, marine, processed food, engineering and auto parts); services open across 137 sub-sectors; India opens central-government procurement for the first time and, in a first, cut car-import duties from over 100% to 10% within quotas — while shielding dairy, cereals, millets, edible oils and apples.
• India–EU FTA — concluded 27 January 2026 at the 16th India–EU Summit, text published February 2026; signing expected end-2026, then European Parliament consent and entry into force in early 2027. India gains preferential access on 97% of EU tariff lines (99.5% of its export value), with nearly US$33 bn of labour-intensive exports going to zero duty; the EU opens 144 services sub-sectors, India 102, with a social-security framework to follow. India shields dairy, cereals, poultry and soymeal; the EU excludes beef, chicken, rice and sugar; India cuts wine and olive-oil tariffs.
• The wider run — India signed with Oman, New Zealand, the UK and the EU across 2025–26, adding to the UAE, Australia and EFTA; it now holds FTAs with 14 of the 16 RCEP economies, with only China outside its FTA network.

Political, security, climate & technology

• 31 dialogue mechanisms; a Security Dialogue since 2006; the Connectivity Partnership (2021); the India-EU Common Agenda on Migration and Mobility.
• Climate: the EU-India Climate Change Dialogue; the EU Green Deal (carbon neutrality by 2050); the Denmark Green Strategic Partnership (2022); ISA, ITER and Arctic Council observer status.
• Technology: Galileo, ITER, New INDIGO (2009), and COVID-era research ties; Anil Wadhwa and Samir Saran see room in AI, biotech and 5G/6G. The Trade and Technology Council (2023) runs working groups on strategic technologies, digital governance and clean-energy technologies.

Areas of concern · and Brexit

Trade, regulation & politics

• CBAM is the sharpest live friction. India won no exemption from the EU’s Carbon Border Adjustment Mechanism, only an assurance that any flexibility given to third countries would extend to it; iron and steel make up nearly 90% of India’s CBAM-exposed exports, with compliance costs put at US$2–4 bn a year against a €500 m EU green-transition pledge. Other frictions — data security (the EU withholds ‘data-secure’ status), IPR and compulsory-licensing limits, opened procurement, and the loss of GSP preferences that had kept Indian textiles competitive with Bangladesh.
• Political irritants: criticism of Indian policy on Jammu & Kashmir and the Citizenship (Amendment) Act; divergent expectations over Ukraine.

Trade as a hedge — the geoeconomic reading

• Both deals were settled while the United States, under a second Trump administration, put 50% tariffs on India (peaked 2025) and pressed it over Russian-oil purchases; a February 2026 interim deal cut the reciprocal tariff to 18% and dropped the Russian-oil penalty, and the US Supreme Court later struck down the emergency-power reciprocal tariffs. Many read the deals as hedging, not alignment — in Iván Gonzalez-Pujol’s terms a mixed strategy of cooperation and competition under uncertainty, with FTAs a means of economic diversification.
• Chietigj Bajpaee (Chatham House) and Shairee Malhotra (ORF) read the run of FTAs as a reaffirmation of strategic autonomy and a shift toward predictable partners. Sankalp Gurjar frames it through geoeconomics — India’s strategy since 2019 on three pillars (staying out of RCEP, Atmanirbharta, FTAs with trusted partners), all serving one goal: managing the China challenge. Alberto Rizzi (ECFR) applies the same lens from Europe’s side; Mark Linscott is the sceptic — the ‘mother of all deals’ label is “political hyperbole” with only a modest near-term return.

“India, faced with US tariffs, is pushing for certainty in its trade relations, while Europe is seeking diversification to reduce reliance on an increasingly erratic American administration.”

Alberto Rizzi, ECFR

Geopolitical strains inside Europe

• The AUKUS announcement — made without consulting France, a day before the EU’s Indo-Pacific strategy — shocked Paris; failures over Crimea (2014) and the 2015 refugee crisis exposed disunity; Brexit weakened cohesion; the EU’s China-market reliance and BRI participation complicate alignment with India.

Brexit and India

• Concerns: the welfare of a near-three-million diaspora; a large moving population of tourists, professionals and students; and work-visa curbs that had already cut Indian student numbers.
• Offsetting gains: the Commonwealth gains significance; Britain stays a key partner for services trade, defence supply and P5 weight, and has reoriented toward the Indo-Pacific through AUKUS. For the EU tie, Delhi loses its most familiar interlocutor — which raises the value of engaging Brussels and all 27 members directly.

Scholars · theory · policy (Europe)

Views of scholars

• Rajiv Bhatia: the relationship stands at an inflection point to shape a multipolar, just order. Dhruva Jaishankar: Europe is a strong target for India’s multipolar strategy — a major power centre without the complications of the US and China relationships.
• Harsh V. Pant: the EU cannot speak with one voice; its faith that foreign policy is merely an outcome of economic policy is a ‘liberal fallacy’ — the economic system rests on political order, not the reverse.
• Shada Islam, Samir Saran, Christian Wagner and Rajesh Mehta: an ambitious FTA plus 5G/AI/biotech and climate/defence convergence, with two-way mobility and regular high-level engagement, can lift the partnership.

Theoretical lenses: Realism — strategic autonomy, balance vs China · Liberalism — interdependence, WTO/UN · Constructivism — shared values · Dependency → equitable partnership

Policy direction

• Spend more energy on France — experts argue it can become ‘the new Russia’ for India (P5, IOR presence, reactors, climate and multilateral convergence); put the best foot forward with Britain; reorient the Eurosceptics in Indian officialdom; and improve the trade and regulatory regime European policymakers find restrictive.
• S. Jaishankar (Bled, 2021): Delhi under-attended to Brussels amid focus on the big countries, and now engages all 27 members and seeks a more ‘compact’ relationship.