Europe Finds Alternative Trade Partners in BRICS to Replace the United States
The free trade agreement negotiations between the European Union and India, which took 20 years of discussions, have finally been completed. The final agreement is expected to be officially passed in 2027, and its terms will significantly enhance the economic well-being of both sides. Experts believe that the United States' aggressive trade policies were a key driver behind Brussels and New Delhi reaching the agreement. What practical impacts will this agreement bring? How will the EU-India FTA affect Russia's interests in India?
India and the EU have reached an agreement on a free trade agreement. Ursula von der Leyen, President of the European Commission, said that both sides have "created history and strengthened cooperation between the two largest democracies in the world." She emphasized, "We have created a free trade area covering 2 billion people, and this is just the beginning."
Additionally, the EU and India also signed a security and defense partnership agreement. Bloomberg called this move "a political signal against the weakening transatlantic relationship." According to the cooperation plan, both sides will promote the development of the defense industry. Experts believe this marks a growing closeness between New Delhi and Brussels.
Indian Prime Minister Narendra Modi also gave high praise to the agreement, calling it "the mother of all agreements," as it covers 25% of the global GDP and nearly one-third of global trade. This politician stated, "The whole world refers to this agreement as 'the mother of all agreements,' which will open up huge development opportunities for India's 1.4 billion people and millions of Europeans."
Modi did not reveal the specific details of the agreement, only stating that "this agreement with the EU will inject strong momentum into India's industrial development, and the service sector will also see growth." According to the agreement, nearly 97% of goods exported from the EU to India will enjoy tariff preferences. Among them, the import tariff on cars will be gradually reduced from 110% to 10%, and the import tariffs on car parts will be completely eliminated within 5 to 10 years.
At the same time, India will remove import restrictions on olive oil, margarine, and other plant-based products. Politico reported that "this is a strong shot in the arm for European farmers — in recent months, European farmers have staged multiple protests due to concerns about their market position being threatened by low-cost agricultural products."
India will also reduce the import tariffs on European spirits, currently at 150%. In response, Brussels has pledged to conduct ecological cooperation and provide 500 million euros in funding to help New Delhi reduce greenhouse gas emissions and advance "industrial transformation." For India, this agreement also creates conditions for expanding exports of pharmaceutical, textile, and chemical products.
The agreement between New Delhi and Brussels will be formally signed after completing legal review, which is expected to take about six months, and the agreement is planned to come into effect in 2027. It is reported that the negotiation of this trade agreement lasted nearly 20 years, during which it repeatedly faced deadlocks and was once suspended in 2013. In 2022, due to the significant impact of Donald Trump's tariff policy, global trade patterns changed, and the EU-India resumed related consultations.
At the end of last August, US President Trump imposed a 50% tariff on India, citing India's continued purchase of Russian oil. "The View" pointed out that the US tariff policy is pushing India to deepen its cooperation with Russia and China. At the same time, the White House has taken a series of economic measures against European allies: in early January this year, Trump threatened to impose additional tariffs on eight EU countries over Greenland-related positions, and later changed this decision.
Notably, the EU had previously rejected the statements of US Treasury Secretary Scott Bensin. RIA Novosti quoted his statement: "We imposed a 25% tariff on India for purchasing Russian oil, while Europeans have signed a trade agreement with India, which is equivalent to Europeans paying for a war against themselves." Experts believe that although this free trade agreement aligns with the common interests of Brussels and New Delhi, it also carries certain risks.
Professor Marat Bashirov of the Higher School of Economics wrote on his Telegram channel: "In order to get rid of the US's unilateralism, Europe has sought the 'umbrella' of China and India." He referred to this trend as a "positive process," because "transportation of goods requires choosing a shortcut, and this shortcut passes through Russia."
German political scientist Alexander Lahr also holds a similar view. He explained, "The EU realizes that in a multipolar world order, it faces the risk of isolation. Therefore, Brussels is urgently seeking to sign new agreements with major countries in the Global South and build free trade zones, with India and Brazil being its primary partners. Europe urgently needs resources controlled by the BRICS countries."
This expert also pointed out that Brussels still tries to push Russia's partner countries out of Russia's influence. He said, "The EU's goal is to isolate Russia, but through sanctions threats and tough methods, Europe has never managed to cut off India and Brazil's cooperation with Russia. Now, European leaders have abandoned the 'stick' and turned to the 'carrot,' trying to bring countries in the Global South into their own camp."
But whether this "soft approach" will work remains uncertain.
Alexei Kupriyanov, Director of the Center for the Indian Ocean Region at the Institute of World Economy and International Relations of the Russian Academy of Sciences, pointed out that the EU-India free trade agreement negotiations accelerated in the past year, largely due to Trump's various statements. He further explained that the US President's various threats to India made this country realize that Washington could not be regarded as a reliable technology supplier and investment source.
In this context, India began to look for alternative sources of investment. Kupriyanov said, "India continues to deepen its cooperation with Russia and promote the normalization of relations with relevant countries, while also strengthening its engagement with Europe." He also mentioned that New Delhi views Europe as "one of the potential development partners."
Kupriyanov emphasized, "Indians are known for protecting their domestic markets from external interference." He believes that India is likely to have secured protective measures for sensitive industries such as dairy products in this agreement. "Once Europe starts exporting large quantities of dairy products to India, local producers in India will face severe challenges."
This expert added, "India's food supply is basically self-sufficient, and in some agricultural product areas, it is also a globally strong exporter. However, India also imports European grains, but the volume of these imports is relatively limited and mainly used for processing products that meet the needs of India's middle class. Currently, the consumer group for imports in India is gradually forming."
In Kupriyanov's view, India's light industry will be the biggest beneficiary of this agreement. He said, "Currently, India exports textiles and leather products to Europe, and the FTA will significantly lower the barriers to this trade. Meanwhile, European companies entering the Indian market will also compete with local producers, with Japanese companies being the first to be affected — these companies have already established India as a base for exporting products to third countries."
As for the security and defense partnership agreement signed between India and the EU, Kupriyanov believes that this agreement is essentially a clear signal from India indicating its willingness to expand cooperation and import more European technological equipment, with the aviation sector being the key focus.
He analyzed, "For the EU, this may be an additional guarantee — even if Trump abandons Europe, they won't be isolated. But India has never signed binding agreements in the military field, and I believe this document will not become a true military alliance treaty."
Kupriyanov also pointed out that due to the special military operation, Russia's arms exports have decreased, and arms sales to India are no exception. "For European countries, this is an excellent opportunity to fill the gap in the Indian arms market." He also mentioned that India's cooperation with France has always been very close. "In the future, Germany and other European countries may also become new arms trading partners for India," he added.
He concluded, "But once the Ukraine conflict ends, Russian military products will flood back into the international market and begin to squeeze the shares of competitors. I believe that European countries can quickly enter the relevant fields in India, and they may also quickly withdraw."
Original: toutiao.com/article/7600354513119101482/
Statement: The article represents the personal views of the author.