by Alexandra Brzozowski*
BRUSSELS – It has become a lonely world for Europe. With the transatlantic alliance in tatters, China losing its lustre, and Russia being Russia, the EU is looking for new friends. Ursula von der Leyen is betting she will find them them on the subcontinent.
The Commission president, joined by 21 commissioners, is heading to New Delhi on Thursday in order to, in EU-speak, “boost ties" with the world’s fifth-largest economy.
The trip comes as the bloc pushes to upgrade trade partnerships with a number of key countries, including Mercosur and South-East Asia.
The second EU-India Trade and Technology Council (TTC) will be part of the visit, one of only two such formats, the other one being a bilateral EU forum with the United States, will be part of the visit.
“A new look for greater cooperation, to be clear, was already identified and planned for quite a while ago," one EU official briefed on the preparations told reporters.
"But the timing of this visit is, of course, particularly interesting given the global developments that we’re facing,” the official added.
‘Strategic priority’
In their preparations, the Commission told EU ambassadors that it considers the relationship with India a "strategic priority," sources familiar with the talks said.
A leaked Commission 2025 work programme, previously seen by Euractiv, said the bloc’s executive is expected to present a new Strategic
EU-India Agenda in the spring.
Both sides are expected to tout the “deepening of bilateral relations” and the “growing strategic convergence” between the EU and India, according to a draft TTC statement previewed by Euractiv.
EU officials say the bloc should explore ways to cooperate more closely on security and defence and consider mutual benefits of improving economic relations, including improving supply chains and foreign direct investment.
They also say higher engagement in the security agenda in the Indo-Pacific region is in the cards.
“They’re fundamentally interested in a free, open and secure Indo-Pacific. But in the same way, we think about Russia’s border progression in Ukraine as being fundamentally linked to the Eurasian and East-Asian security process,” the official added.
"India’s leadership must also grapple with a complex, unpredictable new era in US policymaking," James Crabtree, distinguished fellow at the European Council on Foreign Relations (ECFR), told Euractiv.
"Given events in Washington, stronger ties with Europe can provide helpful balance as India continues to hedge between major global powers," he added.
Russia connection
The elephant in the room, however, will be New Delhi’s close ties with Moscow.
Indian Prime Minister Narendra Modi visited Russia twice in 2024, and President Vladimir Putin is expected to return the favour this year.
Since Russia’s full-scale invasion of Ukraine, Western partners have criticised the country’s continued friendly approach, the Indian government’s decision not to condemn the invasion, and its refusal to join international sanctions against Russia.
A potential breakthrough in US-Russia peace talks on Ukraine might give Europe fresh leverage to pull India closer to the West.
But for now, a major European grievance is that despite Western sanctions, Indian refineries have benefited from Russia’s reduced oil prices. New Delhi has helped turn Russian crude oil into diesel and gasoline for the global market – and with that, feed Moscow’s war machine.
EU officials briefed on the preparations told reporters the European side plans to raise the issue of sanctions enforcement with their Indian counterparts but added they do not expect Russian oil to feature too prominently in those talks.
"We should also stop beating India up over oil purchases from Russia, but that’s the wrong target – as all the refined products go to European buyers," one EU diplomat said.
"Instead, we should beat them over the head over the high-tech exports to Russia – on later they know they have an issue," the diplomat added.
Although Russia has been India’s primary defence equipment supplier for the last two decades, with 65% of the country’s weapons purchases supplied by Moscow, New Delhi has recently made efforts to gradually reduce its dependence on Moscow in this area.
In the long term, EU diplomats believe that part of a more strategic deal with New Delhi could be replacing some of those by offering European alternatives. France, for one, has taken such steps with a recent multi-billion-dollar deal to supply India with French fighter jets.
An improvement of relations between Russia and China, meanwhile, including ramped-up military cooperation and increased Russian weapons supplies, has made New Delhi wary.
"If we are smart, we can use this to our advantage, too, by saying ’look, your enemy is our enemy’ – so let’s cooperate closer," a second EU diplomat said.
Trade talks revival?
Differing views on trade, which have only slowly progressed over the past years, are likely to be a key obstacle to closer ties.
Brussels and New Delhi resumed talks in 2022 after more than eight years of stalled negotiations on a comprehensive EU-India trade agreement (FTA), with the renewed push driven mainly by the desire of EU countries to increasingly de-risk from China.
For the EU, a free-trade agreement with India would fit into the bloc’s strategy of increasing engagement with the Indo-Pacific region.
But slow progress in establishing the three TTC working groups – on strategic technologies; digital, green and clean energy technologies; and resilient value chains, trade and investment – which took nearly a year, somewhat hampered the enthusiasm that tangible results can be achieved quickly, officials on both sides say.
Proponents of a deal have said they bet that greater access to the vast Indian market could reduce the bloc’s reliance on China.
However, EU officials insist that the notion of replacing trade volumes with Beijing is the wrong framing for the recent push and is not remotely accurate when it comes to the type of goods involved.
A deal could see increased imports of essential goods from India, such as aircraft, electrical machinery, chemicals, and diamonds, as well as better standardisation in the digital services sector.
The EU has also pushed for lower tariffs to gain greater access to Indian markets for its exports of cars, alcoholic drinks, and agri-food products such as cheese.
India, meanwhile, is seen benefiting more in services and would like easier visa access to the EU for Indian professionals. New Delhi is also eyeing a competitive edge for key exports to the EU – garments, steel, petroleum products, electrical machinery, and pharmaceuticals.
Leaders on both sides had once optimistically declared the aim was to strike an agreement before voters in India and across the EU headed to the polls in 2024.
However, not much progress has been made since then, with Indian officials blaming the EU for what it called "irrational" standards on both agriculture and environmental protection.
Another major roadblock remains agriculture. The differences between the two systems – and their strategic importance for jobs and the economy – are, indeed, stark.
India, home to nearly 18% of the world’s population, had its agriculture, forestry, and fisheries sectors contribute 16% to GDP as of 2023. Those sectors also employ 44% of the workforce. By contrast, the EU’s agricultural sector employs just 5% of its workers and accounts for 1.3% of GDP.
Sugar is one of the many goods that could become a sour point. Some EU member states, such as Germany, believe agriculture should be excluded from a free-trade deal to speed up negotiations and that the focus should be instead shifted to industry and technology.
New Delhi is not a fan of that approach, to put it mildly, as leaders there see agriculture as the backbone of any agreement.
India’s Trade Minister Piyush Goyal said in October that a free-trade deal cannot be agreed upon if the EU insists on getting access to the country’s dairy sector.
With talks stalling, some EU member state diplomats have indicated they would be increasingly open to getting a less ambitious deal over the line that focuses on tech and industry deals, as it would ensure European companies get a slice of India’s domestic investment boom.
*Thomas Moller-Nielsen contributed reporting
**first published in euractiv.com
By: N. Peter Kramer
