Mon Jan 26 05:10:00 UTC 2026: # EU-India FTA Looms as Trump’s Protectionism and Ukraine War Reshape Geopolitics

The Story:
A potential Free Trade Agreement (FTA) between the European Union (EU) and India is gaining momentum, driven by a combination of factors, including former U.S. President Donald Trump’s protectionist trade policies and the ongoing Ukraine war. As highlighted by Ursula von der Leyen’s visit to New Delhi in February 2025, both the EU and India see a strategic imperative to deepen ties in the face of an emerging G2 world dominated by the U.S. and China. While past attempts at an FTA stalled due to disagreements on agricultural products, automobiles, intellectual property, and labor standards, the current geopolitical climate is pushing both sides to overcome these hurdles.

Key Points:
* Donald Trump’s trade policies, including increased customs duties on Indian and EU imports, have incentivized closer EU-India cooperation.
* Negotiations for a EU-India FTA were suspended in 2013 but resumed in May 8, 2021 due to geopolitical shifts.
* The proposed FTA is expected to exclude the sensitive agricultural sector.
* EU-India relations extend beyond trade, encompassing investment, technology, and defense cooperation.
* The EU increasingly views India as a key partner in the Indo-Pacific region, particularly in maritime domain awareness.
* Differing views on human rights issues, particularly related to India’s Citizenship Amendment Act (CAA), have caused tensions between the European Parliament and India.
* India’s continued close ties with Russia, especially regarding oil imports and military cooperation, pose a significant challenge to EU-India relations, particularly in the context of the Ukraine war.
* In 2024-25, India imported $63.84 billion of Russian oil.

Critical Analysis:
The convergence of several factors, including the perceived unreliability of the U.S. under a protectionist regime and the imperative to diversify away from China, is pushing the EU and India towards closer ties. India’s balancing act with Russia, however, remains a significant point of contention. The willingness of both sides to move forward with an FTA, even in a diluted form, signifies the strength of the strategic rationale driving the partnership.

Key Takeaways:
* Geopolitical pressures, more than purely economic considerations, are driving the EU-India FTA forward.
* The agreement, while strategically important, will likely be limited in scope to avoid contentious issues like agriculture.
* India’s relationship with Russia remains a major obstacle to deeper EU-India cooperation.
* The EU’s increasing focus on realpolitik is impacting its approach to human rights concerns in India.
* The success of the EU-India partnership will hinge on their ability to navigate the complexities of the evolving global order and their differing perspectives on key geopolitical issues.

Impact Analysis:
The successful negotiation and implementation of an EU-India FTA could have far-reaching consequences. It would create a significant new trade bloc, bolstering the economic strength of both regions and potentially shifting global economic power dynamics. The agreement could also foster increased cooperation on strategic issues, such as technology development and maritime security in the Indo-Pacific region. However, the FTA’s success depends on whether both sides can overcome the challenges posed by differing perspectives on human rights and India’s relationship with Russia. A stronger EU-India partnership could serve as a counterweight to the growing influence of the U.S. and China, contributing to a more multipolar world order.

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