The European Union and India have sealed a historic free trade agreement after nearly two decades of negotiations, marking a major shift in the global trading landscape as tensions with the United States escalate. The agreement will see the gradual elimination of tariffs on most imports between the two sides, with exceptions for some strategic sectors.
The move is seen as a strategic effort by the EU and India to protect their respective economic interests from increasingly erratic US trade policies, including President Donald Trump's use of tariffs as a tool of geopolitical pressure.
Trump has yet to officially react to the deal, but the seeds of Washington's discontent are already starting to appear. US Treasury Secretary Scott Bessent publicly criticized the EU for continuing with the deal with India, even though the US has imposed high tariffs on the country following its oil purchases from Russia.
In New Delhi, Indian officials insisted that relations with the US remain strong, while stressing the country's commitment to the multilateral trading system. India sees the deal with the EU as an opportunity to expand market access for key sectors at a time when talks with Washington have yet to yield results.
Analysts have described the EU-India deal as one of the best options available as major markets such as the US and China increasingly close. For Europe in particular, frequent tariff threats from Washington have prompted the bloc to diversify its trading partners and reduce strategic dependencies.
But the deal also highlights Europe’s larger dilemma of balancing the need to become more sovereign and economically competitive, while maintaining stable transatlantic ties at a time when US security commitments to its allies are increasingly questioned.
