The world is witnessing a seismic shift, and a monumental EU-India trade deal is the loudest signal yet: a new global order is emerging, and it's no longer solely US-centric!
Remember 2007? It was a year of iconic tech launches, brewing financial storms in the US, and significant expansions for the EU and India's economies. It was also the year that trade discussions between Delhi and Brussels first began. Fast forward nearly two decades, and after a period of stop-and-start negotiations, a landmark agreement has finally been inked this very week!
On a recent Tuesday, top officials – European Commission President Ursula von der Leyen, European Council President António Costa, and India’s Prime Minister Narendra Modi – unveiled what's being called the "mother of all deals." This isn't just any trade pact; it's a grand alliance poised to connect roughly 2 billion consumers and represent a staggering quarter of the global GDP. What does this mean in practice? For starters, it opens up parts of India's historically protected domestic market, with a keen eye on boosting manufacturing and services exports. In return, European car and wine enthusiasts in India's burgeoning middle class can look forward to more affordable European imports.
But here's where it gets truly significant: this EU-India comprehensive strategic agenda is far more expansive than just trade. It delves into crucial areas like defence and security, reinforces commitments to multilateralism, and fosters cooperation in mobility and a wide array of other fields.
So, what catalyzed this dramatic acceleration after 20 years of stalled progress? The answer, perhaps surprisingly, is Donald Trump. The EU-India free trade agreement is, in essence, a clear indicator of the dawning of a post-US global landscape, a world grappling with constant threats to national sovereignty, aggressive trade tariffs, and the erosion of international institutions.
The initial trade talks, which faltered in 2013 due to disagreements over sectors like cars, alcohol, agriculture, and dairy, were revived in 2022. The post-pandemic era had sparked a global desire to "de-risk" and diversify supply chains, moving away from an over-reliance on China. Ironically, it wasn't China that ultimately propelled this deal to completion, but rather the looming specter of Trump. In December 2024, even before his second inauguration, the US President had already sent ripples of unease across Europe with his audacious suggestion of acquiring Greenland. The fact that a close ally was contemplating actions that threatened territorial integrity led to a widespread feeling in Europe of being "home alone," exacerbated by growing friction within the once-unshakeable transatlantic relationship.
Adding to the geopolitical turbulence, on his very first day in office, Trump imposed substantial tariffs on America's neighbors, Canada and Mexico. This was followed by a wave of "liberation day" taxes levied on 90 countries worldwide. India, in particular, faced one of the highest tariff rates at a staggering 50%, further compounded by an additional 25% due to its purchase of discounted Russian oil. Most recently, the tariff weapon was brandished once more against the EU and the UK, following a deployment of NATO soldiers to Greenland by eight countries. Consequently, public opinion surveys in Europe now depict the US not just as unreliable, but as a direct threat.
Now, terms like "de-risking" and "decoupling" are back in vogue in Europe, but with a crucial twist: the target is no longer China, but rather Trump's America. The stakes are higher than just supply chains; they involve the strategic capacity to resist coercion. A prime example of this shift is the French government's recent decision to prohibit officials from using US video-conferencing tools like Zoom, actively promoting its own domestic platform, Visio.
The broad scope of the evolving India-EU partnership points towards a stronger alignment in their commitment to multilateral institutions. It also signifies enhanced cooperation in critical areas such as security and defence, research, mobility, and connectivity, including a more robust engagement in the Indo-Pacific region. As the US appears to be retreating inward, the Indo-Pacific, once a focal point of American involvement in Asia, is now more open to collaborative ventures with the EU.
While this EU-India trade deal is the most significant of its kind, it's also part of a larger global trend. Nations worldwide are actively forging new alliances. Brussels has recently finalized a trade agreement with the South American Mercosur bloc, with more on the horizon. India itself has secured agreements with the UK and New Zealand in recent months. Although ratification and implementation are processes that take time and may encounter hurdles (like the delays seen with the EU-Mercosur deal), the underlying shift is undeniable. The vision of a multipolar world, characterized by strategic autonomy and even de-dollarization – a dream long held by many outside the West – is now rapidly taking shape.
Just a day before the EU-India summit, European leaders were honored guests at India's Republic Day celebrations, witnessing the impressive military parade and vibrant cultural displays. The scenes projected an image of camaraderie and optimism, a stark contrast to the recent somber mood in Europe. The world is indeed moving forward. The era of "America First" increasingly appears to be evolving into "America Alone."
What are your thoughts on this shift towards multipolarity? Do you agree that the US's current approach is pushing allies towards new partnerships? Share your views in the comments below!
*Ravinder Kaur is a professor of Asian studies at the University of Copenhagen and is currently writing a book on the history of the global south.
