Tension from the U.S. might draw India to Brussels, yet EU-India accord complications loom due to potential sanctions involvement.
The relationship between the European Union (EU) and India is strengthening, with progress being made towards a free trade agreement expected by the end of 2025. This development is largely driven by India's need to diversify export markets following US tariffs on its goods.
The US tariffs, imposed due to India's continued imports of Russian oil, have strained US-India relations. India views these tariffs as unfair, given the US and EU's ongoing substantial trade with Russia, including in energy and critical raw materials. For instance, the EU's trade with Russia in 2024 was valued at €67.5 billion, and it imported record LNG volumes, while the US continues imports of Russian uranium hexafluoride and other materials.
On the EU's side, while it has imposed sanctions on Russia over its Ukraine aggression, its trade ties with Russia remain significant, especially in the energy and heavy industry sectors. India's criticism of the EU's "double standards" arises from its purchases of Russian oil, a necessity to maintain affordable energy and economic stability, especially as traditional suppliers redirected supplies to Europe post-conflict.
The blacklisting of Nayara Energy, an Indian refinery, by the EU as part of the sanctions has been dismissed as largely symbolic by analysts. However, the sanctions did include products sold back to Europe from India, potentially affecting the EU-India trade balance.
The delicate balance being referred to is between economic strategy and geopolitical pressure. Diplomats have warned that scaling back Russian oil imports by India could lead to a spike in global energy prices. On the other hand, a potential reduction in Russian oil imports by India due to US tariffs could be a win for the EU and Kyiv, as it could affect Moscow's revenue for the war in Ukraine.
President Trump's tariff offensive may deepen ties between India and Europe, as it could accelerate India's drive to diversify away from the US. Conversely, the EU's negotiating style on agriculture is perceived as more sensitive to India's domestic issues compared to the US, potentially making the EU a more attractive trading partner for India.
The potential geopolitical pivot could be triggered by the US tariffs on Indian goods, according to dw.com. This dynamic shapes a relationship where India and the EU are cooperating more closely, even as each navigates complex geopolitical pressures related to Russia and US trade policies.
[1] dw.com [2] eu-russia.eu [3] tradingeconomics.com [4] indianexpress.com [5] thehindu.com
- The US tariffs on Indian goods, driven by the US's policy towards Russia, have led to India critiquing the EU's "double standards" due to its ongoing trade with Russia, particularly in the energy sector, highlighting a complex intersection between war-and-conflicts, policy-and-legislation, and politics.
- As the EU seeks to balance its economic strategy with geopolitical pressure, it continues to engage in substantial trade with Russia, generating general-news discussions about the potential impact on EU-India relations, trade balance, and the broader global economy.
