Opinion | How the India-EU trade agreement undermines US economic coercion
Beyond trade liberalisation, the partnership will weaken Washington’s ability to use tariffs as leverage and dictate the rules of global economic engagement
This response reflects deep apprehensions in Washington about the declining effectiveness of sanctions-based power and the growing autonomy of major Global South economies in an emerging multipolar order. For emerging economies watching closely, the agreement underscores a broader shift towards flexible partnerships, diversified trade routes and reduced vulnerability to external economic pressure from any single power.
The India–EU trade deal is unprecedented not only in size but also in scope. Together, India and the European Union account for nearly two billion people, roughly 25 per cent of global gross domestic product and a third of global trade. It was billed as the largest such deal concluded by either side.
Unlike conventional tariff-focused FTAs, this agreement is comprehensive, covering not just goods and services but also investment, digital trade, regulatory standards, sustainability clauses, intellectual property and labour mobility. Tariffs on more than 95 per cent of exports on both sides will be reduced or eliminated at the commencement of the agreement or over a phased period of up to 10 years.
For India, this means expanded market access for textiles, leather, pharmaceuticals, engineering goods and IT services, along with a greater recognition of professional qualifications. For Europe, the deal offers market access and potentially supply chain resilience as well as a long-term manufacturing partner outside China.