Historic trade agreement between European Union and India challenges Washington's protectionist approach as both blocs seek alternatives to volatile U.S. policies.
The European Union and India have concluded a landmark free trade agreement after nearly two decades of negotiations, creating the world's largest trading bloc by population and presenting a direct challenge to the Trump administration's tariff-heavy trade strategy.The comprehensive deal, announced Tuesday, will eliminate tariffs on the majority of goods traded between the 27-member EU and India, affecting a combined market of over 1.9 billion consumers. Both Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen hailed it as the "mother of all deals."The timing appears strategically calculated. The agreement comes as the United States has imposed punitive tariffs of 50% on Indian goods and 15% on EU imports, citing India's continued energy purchases from Russia and broader trade imbalances. Treasury Secretary Scott Bessent criticized the EU-India pact, telling ABC News that "the U.S. has made much bigger sacrifices than Europeans have.""The relationship structure [between the U.S. and India] is very strong," India's Petroleum Minister Hardeep Singh Puri told CNBC, suggesting New Delhi views the EU deal as complementary rather than competitive to U.S. relations. "Everybody needs to chill a bit."Trade analysts see the agreement as a hedge against Washington's increasingly unpredictable trade policies. Hosuk Lee-Makiyama, director of the European Centre for International Political Economy, noted that both sides have traditionally protected strategic sectors like agriculture and automotive manufacturing."This is probably one of the best deals they can do at the moment," Lee-Makiyama said, highlighting that "the U.S. and China will remain closed as new market openings go."The geopolitical implications extend beyond trade. European Parliament foreign affairs committee chair David McAllister emphasized the bloc's need for greater economic sovereignty while maintaining transatlantic ties. "Europe needs to become more sovereign... but this relationship needs to be based on mutual respect and trust," he stated.The agreement positions both the EU and India to reduce their economic dependence on the United States at a time when NATO commitments and defense partnerships face uncertainty under the Trump administration's "America First" doctrine.Source: CNBC
