EU Relations

EU

• relations date back to 1960s when India became one of the first countries to establish ties with european economic community
• share democratic values, market economies, pluralistic societies
• multifaceted partnership growth to encompass strategic, economic, tech env, cultural dominance

Cooperation

• Geostrategic cooperation
  • both counter china’s growing influence
    • EU’s Golden Gateway vs China’s BRI
  • Indo Pacific focus: EU’s Indo Pacific strategy places India Centrality
• Economic
  • bilateral trade $137B in 2023-24
  • Joint platform: India-EU trade & tech council 2022
• Development
  • SDG - smart cities, water, sanitation eg. ISA, Kochi Smart City
  • Health: India-UK partnership on vaccines & therapeutics
  • Migration: CAMM
  • Climate: Clean Energy & Climate Partnership 2017
    • Green Grids Initiative at COP26
• S&T
  • Horizon 2020: Joint climate / polar research
  • Global innovation partnership: India-UK $100M over 14yr
  • Digital & AI cooperation under TTC
• Defence & security
  • tech access
  • maritime security: IFC-IOR partner w/ EU NAVFOR
  • Counterterrorism: Europol-CBI pact
  • Naval Cooperation: Maiden Joint Exercise in Gulf of Aden 2021

Significance

for india

• FDI & exports: EU is top FDI & export destination IT Pharma, Textiles
• Defence: Airbus C295 Make in India
• Innovation: AI, Digital Governance support via TTC

for EU

• market access: large indian economy, TEPA w/ EFTA
• human capital: young indian talent for europe’s labour market
• Indo pacific outreach: strategic partnership in global south
• securo SLoC in IOR

India - EFTA Trade & Economic Partnership Agreement (TEPA)

• members: Iceland, Liechtstein, Norway, Switzerland
• benefits for india
  • boost exporst in pharma, garments, machinery
  • investment inflow in food processing, automobile
  • support on UNSC, renewable energy
• challenge
  • data eclusivity & IPR concerns
  • trade deficit, low tariff benefits
  • structural differences in industrilar sectors

Challenges in India - EU Relations

Issue	Details
Trade	EU demands market access in auto, dairy, wines
IPR	india opposes data exclusivity
Data security	EU hasn’t granted data secure status to INdia
Secrvices	India seeks Mode 1&4 access
	EU seeks mode 3 liberalization
ISDS mechanism	EU demands inclusion; india hesitant due to sovereignty concerns
CBAM	carbon tax may affect energy exports, GDP
Human rights	EU flags CAA 2019, minority rights
	india resents external scrutiny
Import share	India’s share in EU import stagnant; chinese expanded
Migration & populism	rise of anti globalization sentiment post brexit

Way forward

• balanced negotiation: focusing on complementaries
• trade & investment: settle tariff disputes, proote bilateral investments
• security coop: deepen counterterorism & cyber collab
• innovation: joint R&D in climate, digital & health
• cultural: mobility, migration, education
• multilateralism: WTO, G20, UN

India EU FTA 2026

Concluded at 16th summit in Jan 2026, ending 20 year deadlock under Towards 2030: Comprehensive Strategic Agenda

Landmark outcomes

• duties eliminated on over 90% of bilateral trade
• EU Removes duties on 99.5% of indian exports, giving $33B Boost to textiles, leather & Gems
• india cuts duties on EU machinery & pharma
• Premium wines duties fall from 150% to 20-30%
• Uncapped student mobility & 9month post study work visa across 27 eu states
• AYUSH: practitioners get legal certainty in EU states
• india protects dairy, wheat, rice, poultry
  • EU protects beef, sugar, rice
• GI protection to GI TEa & Champagne
• Green fund: EU pledge Euro 500M to help indian industrias decarbonize

Geopolitical drivers

• USA factor: strong tariff decisions
• China plus one
• export diversification

Structural challenges

• CBAM: 20-35% equivalent tax on Indian steel, aluminium, chemicals may erase tariff gains
• EUDR: traceability & geotagging rules burden indian coffee, rubber & wood smallholders
• CSDDD: supplier audit data requirements created corp confidentiailty risks
• EU Local Content requirement
• Tariff asymmettry: 75% indian exports already entered EU below 1% tariff
  • India makes deeper cuts than EU
• 3rd country competition: vietnam, Bangladesh already enjoy zero-duty EU access
• QCO dispute: EU opposes india’s mandatory physical audits as non transparent trade barriers
• parity deficit: inida objects to EU env carve-outs for USA while penalizing developing countries

Way forward

• rapid response forum to resolve disputes
• certify idian testing labs under tested once, accepted everywhere principle
• CCTS-CBAM link: align india’s CCTS w/ EU system to prevent double taxation
• use blockchain & satellite based DPI for low cost farmer geotagging under EUDR
• MSME support
• Silicon corridor: use TTC for joint AI & semiconductor R&D
• Data security: align India’s DPDP act w/ EU GDPR te reduce IT compliance costs

India can convert EU green protectionism into advantage through Carbon Credit alignment, DPI traceability, Viksit Bharat 2047 oriented trade integration.