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COVER STORY FEBRUARY 06, 2026 | The Indian Eye 5

India fits neatly into this recalibra- but also a political pressure point.
tion—large, fast-growing, politically Job creation, skills development and
stable, and not aligned with any sin- global exposure are essential to sus-
gle power bloc. taining India’s growth narrative.
It is precisely this strategic con- Still, the deal is not without risks.
vergence that has unsettled Wash- Implementation will be complex,
ington. The sharp criticism from US requiring regulatory reforms, capac-
Treasury Secretary Scott Bessent ity building and political consensus.
reveals deeper anxieties about Eu- Sensitive sectors may face adjust-
rope’s trade autonomy and India’s ment pressures, and the benefits of
geopolitical positioning. By accusing the FTA will accrue unevenly across
Europe of prioritizing commercial in- regions and industries.
terests over solidarity with Ukraine, Moreover, ratification across 27
and by linking the India–EU FTA to EU member states could take time,
continued European purchases of delaying tangible gains. As Shashi
refined fuels derived from Russian Tharoor noted, expectations of
crude, Washington has signaled its immediate benefits would be mis-
discomfort with a deal that compli- placed; the real impact will unfold
cates its own sanctions narrative and over years, not months.
trade leverage. The unresolved India–US trade
From the US perspective, the President Droupadi Murmu speaks during the banquet hosted by her in the honor of European deal remains a critical variable.
timing is awkward. India–US trade Washington is unlikely to abandon
negotiations remain unresolved, with Council President António Costa and European Commission President Ursula von der Leyen, efforts to secure better access to the
lingering disputes over tariffs, mar- at Rashtrapati Bhavan in New Delhi on Tuesday. Prime Minister Narendra Modi, CJI Surya Indian market or to align India more
ket access and strategic alignment. Kant, Vice President C. P. Radhakrishnan, EAM S. Jaishankar and others are also present. closely with its strategic objectives.
The imposition of higher US tariffs (@rashtrapatibhvn X/ANI Photo) But the leverage dynamic has shift-
on India over Russian oil purchas- ed. With the EU pact concluded and
es contrasts sharply with Europe’s other FTAs already in place—with
willingness to deepen trade ties with de-risking from China-centric supply agreements with Western and In- the UK, UAE, Australia and oth-
New Delhi. This divergence exposes chains. Europe has grown wary of ex- do-Pacific partners. ers—India enters negotiations with
a fundamental inconsistency in West- cessive dependence on Chinese man- Domestically, the Modi gov- greater confidence and alternatives.
ern policy: while Washington seeks to ufacturing, while India views China ernment is positioning the FTA as This could either encourage a more
pressure partners into aligning fully as both an economic competitor and validation of its economic steward- pragmatic US approach or harden
with its Russia strategy, Europe is in- a strategic rival. ship. By highlighting opportunities positions further, depending on po-
creasingly hedging—balancing moral Deeper India–EU integration for startups, the creative economy, litical winds in Washington.
rhetoric with economic pragmatism. offers an alternative production research and education, the Prime In the broader global context, the
For India, this moment under- and consumption ecosystem—one Minister is linking global integration India–EU FTA illustrates how mid-
scores the value of strategic auton- that could, over time, reshape glob- with national transformation. The dle and emerging powers are reshap-
omy. New Delhi has consistently al trade flows. This is not lost on emphasis on youth is particularly sa- ing the rules of economic engage-
argued that its energy security and Beijing, which has closely watched lient in a country where demograph- ment. Rather than choosing sides in
economic stability cannot be subor- India’s expanding network of trade ics are a central economic advantage a binary geopolitical contest, India
dinated to great-power rivalries. By is crafting a multi-aligned economic
concluding the EU FTA even as US strategy—engaging the West, manag-
trade talks hang in the balance, India ing ties with Russia, competing with
is demonstrating that it will not put China, and expanding its footprint in
all its economic eggs in one basket. the Global South. The EU, facing its
The message is subtle but clear: India own strategic uncertainties, appears
is open for business, but not on terms willing to meet India halfway.
dictated by any single capital. Ultimately, the agreement sig-
The Russia and China angles nals a shift from defensive trade pol-
add further complexity. Washing- itics to strategic economic statecraft.
ton’s criticism hinges partly on the For India, it reinforces the idea that
claim that India’s refining of Russian growth, jobs and global influence are
oil indirectly finances Moscow’s war increasingly intertwined. For Eu-
effort. India has countered that it rope, it offers a hedge against stra-
purchases oil at discounted rates to tegic vulnerability. For the United
protect its consumers and economy, States, it is a reminder that alliances
and that refined products enter glob- are no longer monolithic and that
al markets through established trade economic diplomacy must adapt to a
mechanisms. The EU’s willingness more plural world.
to sign a major trade deal with India As Parliament debates the agree-
despite this reality weakens the mor- ment and industries prepare for its
al absolutism of the US position and implications, one thing is clear: the
highlights differing threat percep- India–EU FTA is not just about tar-
tions within the West. iffs and quotas. It is about where India
China, meanwhile, looms large Union Minister of Commerce and Industry Piyush Goyal greets during India-EU FTA joint sees itself in the world—and how the
in the background. For both India press conference, in New Delhi on Tuesday. Foreign Secretary Vikram Misri was also present world, including uneasy partners like
and the EU, the FTA is also about the US, responds to that ambition.

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