Strengthening Ties: EU and India's Strategic Trade Partnership

European Commission President Ursula von der Leyen's state visit to India underscores a pivotal moment for EU-India relations. Accompanied by European Council President Antonio Costa, they are set to cement a landmark trade agreement amid shifting global trade dynamics. The collaboration aims to enhance strategic and economic partnerships.

In a visit signifying deepening ties between Europe and India, European Commission President Ursula von der Leyen landed in the national capital on Saturday. She was welcomed by Minister of State for Commerce and Industry Jitin Prasada. Both von der Leyen and European Council President Antonio Luis Santos da Costa are scheduled to be the chief guests at the 77th Republic Day celebrations in New Delhi on Monday. This is seen as a prelude to the India-EU summit and the potential signing of a historic trade agreement.

During a recent address at the World Economic Forum in Davos, von der Leyen declared that the European Union is on the brink of sealing a transformative trade pact with India. Indian Commerce Minister Piyush Goyal touted the proposed free trade agreement as a seminal deal, potentially opening avenues for expanded market access. This comes at a time when global trade is beset with challenges, notably from US tariffs and Chinese trade restrictions. External Affairs Minister S Jaishankar emphasized the need for reinforced collaboration with the EU, aiming to stabilize the world economy in light of unpredictable US policies. He advocated for stronger engagement to fortify supply chains, provide international public goods, and enhance trade and security cooperation.

India and the European Union, grappling with the trade approach of US President Donald Trump, have been driven closer. Tariffs as high as 50 percent on some of India's exports to the US and the EU's dissatisfaction with a pending trade deal with Washington illustrate the need for new alliances. Kaja Kallas, the EU's foreign policy chief, underscored India's crucial role in Europe's economic and strategic landscape. The EU has also laid the groundwork for a fortified security and defense partnership with India. Together, India and the EU account for approximately a quarter of the world's population and GDP. The bilateral trade in goods surged to 120 billion euros in 2024, a jump of nearly 90 percent over a decade, with services trade adding another 60 billion euros.

(With inputs from agencies.)