India–EU ties poised for upgrade with trade deal, defence pact on table

European Commission President Ursula von der Leyen

• India-EU summit may announce free trade and new defence partnership next week
• Trade deal could remove 4 billion euros in tariffs for exporters
• EU-India partnership aims to diversify military supply chains and boost security

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The India-EU summit next week is likely to see the partnership between the two regions move to a new phase, with economic and security partnership taking centre stage at a time when reliability on the US has become a major question.

The two blocs are likely to conclude a free trade deal and announce new defence and security partnership that will help diversify military supply chains for both sides and allow better access to new capabilities, a report by the Times of India said.

However, the trade talks between the two sides have taken more than a decade to reach this stage. European Commission President Ursula von der Leyen noted that while the last mile is the hardest to achieve, it will be more than worth it, she told TOI in an interview.

Leyen told the newspaper that both sides are working “intensively” to resolve all the remaining challenges and to bring the trade deal “over the line”.

In a boost for India, Leyen added that the European bloc is ready to find a workable solution to several key issues such as Carbon Border Adjustment Mechanism (CBAM). The EU President also highlighted that a trade deal could help remove 4 billion euros in tariffs for exporters.

Without explicitly alluding to tensions across the Atlantic, von der Leyen—who arrives on January 24 for the summit—underscored that cooperation between India and the EU has become even more critical at a time when principles such as multilateralism, international law and democracy are under strain, according to the report. She said India and the EU have a shared responsibility to safeguard the rules-based global order and contribute to building a secure and resilient world.

On India’s relationship with Russia, she told TOI that the EU is positioning itself as a dependable, long-term partner for India, grounded in mutual security interests. This partnership, she stressed, is based on “cooperation by choice, not alignment by pressure.”

Responding to a question on Greenland, von der Leyen reaffirmed the EU’s commitment to upholding the sovereignty of Denmark and Greenland, saying the bloc would respond firmly to any challenges while simultaneously working towards a surge in investments in Greenland. The EU president, who will attend the Republic Day parade as chief guest along with European Council President Antonio Costa, also said the new EU–India defence partnership could prove transformative, calling it crucial for shared security interests in an increasingly volatile global landscape, stretching from Ukraine to the Indo-Pacific.

The announcement for the deal could be made after Prime Minister Narendra Modi’s meeting with European Council President Antonio Costa and Leyen, who will co-chair an India-EU summit during their visit to India from January 25 to 28.

The deal if approved and ratified by the European Parliament could provide a major boost to Indian exports such as textiles and jewellery. However, the EU ratification process could take at least a year. The talks between New Delhi and Brussels were started again in 2022 after a nine-year pause, gaining traction last year amid rising trade tensions.

The talks have picked up pace after US President Donald Trump imposed tariffs on both sides upended time-tested relationships. Trump penalised New Delhi for purchasing Russian crude and put a total of 50 percent tariff on Indian shipments. After coming to power in January 2024, Trump’s ties with Europe has also deteriorated over several issues, most recently over Greenland.