The European Union’s trade deal with India is, as Ursula von der Leyen trumpeted on Tuesday, “the mother of all deals”, creating a free-trade zone of two billion people.
Tariffs on 99.5 per cent of goods from India to the EU and 96.6 per cent of European goods exports to India will be eliminated or reduced.
“We have sent a signal to the world that rules-based co-operation still delivers great outcomes,” von der Leyen said.
Brussels and New Delhi have been negotiating the deal for nearly 20 years, albeit with long interruptions, but sealing it has taken on a new importance for both sides since Donald Trump’s return to the White House last year.
Previous US administrations regarded the EU and India as almost indispensable allies, but Trump has humiliated both and incentivised them to reduce their dependence on Washington.
Indian prime minister Narendra Modi used to be close to Trump and he was among the first leaders to visit the White House after the US president’s inauguration last year. But their relationship soured last May when Modi publicly contradicted Trump’s claim to have mediated the end to an armed conflict between India and Pakistan.
Since then, the US has imposed a 50 per cent tariff on Indian goods, 25 per cent of which was in protest against India’s continued import of Russian oil and gas. US treasury secretary Scott Bessent this week accused the EU of hypocrisy because it declined to follow the US lead in sanctioning India.
“We have put 25 per cent tariffs on India for buying Russian oil. Guess what happened last week? The Europeans signed a trade deal with India,” he said, adding that the Europeans were financing a war against themselves.
In a joint statement following the signing of the trade deal, the EU and India expressed concern over the ongoing war in Ukraine and said they would support efforts to achieve a just and lasting peace.
But when EU foreign policy chief Kaja Kallas said that India should put pressure Russia, foreign minister Vikram Misri made clear that New Delhi was not going to budge from its long-standing friendship with Moscow.
“There is a historical context for that. I don’t think we have time to dilate on that. But these are two things that stand on their own and that go forward on their own,” he said.
Where the EU and India appeared to agree was on Trump’s ‘Board of Peace‘, which neither of them is in any hurry to join. In their joint statement, they suggested that the board should stick to its original remit, as authorised by the United Nations Security Council, to oversee the peace process in Gaza.
“They encouraged all parties to implement the resolution in its entirety, in line with international law and relevant UN Security Council resolutions,” the statement said.
“Both sides restated their readiness to support efforts towards just and durable peace and stressed the need for unhindered humanitarian access. They also called for a just and lasting solution, based on the implementation of the two-state solution, through dialogue and diplomacy.”
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