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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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