‘Trump is talking the talk. India and EU are walking the walk’

When leaders of the European Union arrived in New Delhi as chief guests for India’s Republic Day celebrations in January, the visit marked a significant step in deepening the India-Europe ties.

It coincided with the formal conclusion of a long-pending
India–EU trade agreement that had been under negotiation since 2007. This deal is now being described as the “mother of all deals” after European Commission President Ursula von der Leyen called it so.

The description is not just about scale. It is about timing. The agreement brings together two of the world’s largest economic entities when global trade is increasingly witnessing uncertainty, protectionism, and political volatility, particularly emanating from the United States since Donald Trump began his second presidential term in January 2025.

“This deal did not move for almost twenty years,” said Scott Lucas, Professor of International Politics at the Clinton Institute, University College Dublin.

“What changed was not the technical details. What changed was the geopolitical context.”

A deal that was stuck for years

Formal negotiations between India and the EU began in 2007. For much of the last two decades, progress was slow and often stalled altogether.

Disagreements over agricultural protections, intellectual property rights, labour and environmental standards, and market access proved difficult to resolve. Domestic political pressures on both sides limited room for compromise.

What has now been politically agreed comes close to a full free trade agreement. Around 97 per cent of Indian exports to the
EU and approximately 99 per cent of EU exports to India are expected to face either zero tariffs or significant tariff reductions. Some sensitive sectors have been excluded.

“The EU has ring-fenced certain agricultural products, such as sugar,” Lucas said.

“That reflects lessons learned from its controversial trade agreement with South American Mercosur countries, which only narrowly secured approval.”

The economic scope is substantial. Indian textiles, pharmaceuticals, gems, jewellery, and services are expected to gain easier access to European markets.

European manufacturers, technology firms, clean energy companies, and specialised agricultural producers gain improved access to India, one of the fastest-growing major economies in the world.

But according to Lucas, the real importance of the agreement lies beyond trade flows.

Why now?

The timing of the India–EU agreement cannot be separated from developments in the United States.

The return of Donald Trump to a central role in economic decision-making has reintroduced volatility as a defining feature of global trade.

Tariffs have been imposed, threatened, and adjusted with little predictability. Trade policy has increasingly been framed in personal and transactional terms.

“For India, it became clear that there was no predictable path with the Trump tariffs for the next three years,” Lucas said, “And for Europe, it became clear that whether tariffs stay at 15 per cent or go higher, you are not going to have a U.S.–European trade alliance that you can rely on.”

India faced punitive
tariffs, including penalties linked to its purchase of Russian oil. Despite high-level meetings and public optimism, a comprehensive US–India trade agreement did not materialise.

Europe, meanwhile, reassessed its own dependence on Washington at a time when transatlantic economic relations were becoming increasingly fragile.

“Once both sides recognised that this was not temporary uncertainty, a deal that had been discussed for almost twenty years suddenly moved,” Lucas said.

The expanding sphere of India’s influence

For New Delhi, the agreement delivers more than economic access. It shows that India’s patience delivers favourable results.

While a host of countries looked rattled and running for cover after Trump fired his tariff salvos, India said it did not believed in hasty trade deals.

With
Trump rocking the trans-Atlantic cooperation boat, sailing smoothly for decades after the Second World War, Europe reached to India to expedite the trade deal hanging fire for about two decades.

India is now the world’s fourth-largest economy and looks on course to become third-biggest in near future. The Modi government has maintained that its rise as an economic powerhouse and one of the key engines of global economic growth is based on the strong fundamentals of the domestic economy.

This is what is reflected in the respect that India gets at the global stage. The presence of EU leaders at
Republic Day Parade, followed by the conclusion of a landmark trade agreement, reinforced that message.

“This is confirmation that Europe sees India as a partnership it values,” Lucas said.

The deal places India firmly alongside the United States, China, and the EU as a central actor in the global economic system. It also strengthens India’s negotiating position with other partners by demonstrating that it has alternatives.

For Europe, the agreement offers diversification. It provides access to a large market at a time when economic ties with both the US and China are under strain.

The US responds, but uncertainty remains

Shortly after the India–EU agreement was announced, the United States reacted.

President Trump stated that tariffs on Indian goods would be reduced and claimed that India would dramatically increase imports of
US products.

“India is going to take all of our products,” Trump claimed, hoping that the figure would reach 500 billion dollars. However, the Indian government maintained that the fine prints of the trade deal were still being negotiated.

Trade analysts quickly noted that the figure far exceeds India’s current imports from the US, which stood at roughly 45 billion dollars last year. India’s official response was notably cautious.

Prime Minister
Narendra Modi spoke positively about discussions with Washington but stopped short of confirming any final agreement.

“He [PM Modi] referred to agreeing to discuss a deal and agreeing to progress,” Lucas noted. “He did not say there was a final deal, because there isn’t one.”

The distinction matters. While the US has signalled intent, India and the EU have already completed the political core of their agreement.

As Lucas put it, “Trump is talking the talk. India and the EU are walking the walk.”

Leverage rather than alignment

The India–EU agreement does not signal a break between New Delhi and Washington. Instead, it alters the balance of leverage.

By securing near-free access to the European market, India reduces its vulnerability to pressure from any single partner.

Tariff threats become less effective when credible alternatives exist. That shift also helps explain why the US moved quickly to reopen trade discussions.

Europe benefits in similar ways. The deal provides insulation against US unpredictability and reduces reliance on
China.

It reflects a broader strategy among major economies to spread risk rather than depend on one dominant partner.

Immigration, politics, and uneasy societies

One unresolved question concerns migration and public sentiment within Europe.

Several EU countries have seen a rise in
anti-immigration movements in recent years. Indian migrants, including students and skilled professionals, have faced hostility in some contexts. Trade agreements alone do not change social attitudes.

However, political signalling matters.

“When European leaders elevate India as a strategic partner, it reinforces the legitimacy of Indian workers and professionals as contributors to economic growth,” said Lucas, cautioning that backlash movements are driven primarily by domestic politics rather than trade policy.

What comes next

In an international environment defined by shifting alliances and economic uncertainty, the
India–EU trade agreement stands out for its clarity of purpose. While others rely on pressure and public posturing, India and Europe have chosen structure and long-term planning.

The deal is not only about tariffs or trade volumes. It is about how major powers respond when old assumptions no longer hold, and about who is prepared to move when the global economic order begins to change.