EditCinderella at the Ball: the EU–India FTA and the limits of grand optics
The speed with which the FTA was wrapped up after nearly two decades of negotiations is revealing, and the urgency explains key compromises
As the United States threatens to unravel the Bretton Woods trading architecture, the EU and India are signalling continued faith in rules-based trade and institutional ballast, writes Gauri Khandekar.
Gauri Khandekar is Researcher at the Brussels School of Governance, VUB
27 January is set to be a fairy-tale moment in European Union (EU)–India relations. The strategic partners will sign a long-negotiated free trade agreement (FTA), concluding talks underway since 2007. The optics are striking: a day earlier, EU leaders will attend India’s 77th Republic Day celebrations as chief guests, a nod to the partnership’s growing importance. Alongside the FTA, a Security and Defence Partnership will also be signed — a framework the EU reserves for only two other partners.
For a brief moment, everything glitters. Trade, security, symbolism: the full regalia of a maturing partnership appears to be in place. But like Cinderella’s night at the ball, the spectacle merits scrutiny once the clock strikes midnight.
The speed with which the FTA was wrapped up after nearly two decades of negotiations is revealing. This was not the product of sudden convergence, but urgency — adapting to a “Trumpian” world of tariffs and weaponised interdependence. As the United States threatens to unravel the Bretton Woods trading architecture, the EU and India are signalling continued faith in rules-based trade and institutional ballast. That urgency also explains key compromises, including the exclusion of agriculture, a politically combustible sector on both sides.
Economically, the logic is clear. For the EU, the FTA offers trade and supply-chain diversification away from a problematic China and an unreliable United States, while firmly anchoring Europe in one of the world’s fastest-growing major economies. For India, it promises greater market access and investment flows as New Delhi consolidates its ambitions as a manufacturing, technology, and defence hub. The ball gown fits — but it is delicate.
Once the clock strikes midnight, deeper asymmetries reassert themselves. Despite an expanding agenda spanning climate, energy, urban development, and the Indo-Pacific, EU–India ties remain shaped by persistent mismatches. The EU’s normative and political reflexes often sit uneasily with India’s hard-security worldview, while European engagement with India’s internal affairs has reinforced perceptions of misalignment and overreach. Without a grounded appreciation of India’s threat perceptions and sovereignty sensitivities, commercial success risks masking deeper unease.
These tensions have been most visible since the Russia–Ukraine war. EU pressure on India to align with its stance on Moscow has strained ties. For India, Russia is not simply another partner but a long-standing ally — one that has defended Indian interests in international forums, stood by New Delhi during pivotal conflicts, and supplied critical defence capabilities and nuclear energy cooperation. Russian oil has also brought energy security for a population of 1.4 billion.
European criticism rings hollow because it coexists with clear double standards. While urging India to curb Russian energy imports, the EU has continued to benefit indirectly. By 2024, India had become one of Europe’s largest suppliers of refined petroleum products, much of it processed from Russian crude. The contradiction is not lost on New Delhi.
While India confronts sustained Chinese military pressure along its Himalayan border, EU trade and political engagement with Beijing have continued largely unaffected. Silence on Pakistan-sponsored terrorism persists even as Pakistan receives European financial assistance and preferential market access. In Bangladesh, European responses to democratic backsliding and the persecution of minorities have remained muted. India perceives a pattern of selective engagement, not strategic solidarity.
Against this backdrop, the new Security and Defence Partnership could do more for both sides. The timing is favourable. The EU is embarking on a sustained defence build-up, while India is emerging as a defence producer and exporter. India’s BrahMos missile and air-defence performance during Operation Sindoor in 2024 underscored its technological maturity. Co-production and co-development could allow both sides to reduce costs, diversify procurement, and anchor cooperation in long-term interests rather than episodic alignment.
India’s caution toward FTAs remains well-founded. Of the 13 agreements it has signed, most have produced rising imports with limited export gains. Between 2017 and 2022, imports from FTA partners grew more than twice as fast as exports, widening the trade deficit. India’s FTA utilisation rate remains low. For this agreement to endure, it must therefore be institutionally functional, with mechanisms to address imbalances and regulatory frictions early.
The EU–India FTA is a necessary achievement in an unsettled world. But once the carriage turns back into rags — and vegetables — unresolved asymmetries will still be there. Trade may open the door. Whether the EU and India step through it as genuine partners will depend on reciprocity, realism, and the willingness to confront uncomfortable truths once the glitter fades.
Caption: Commission President Ursula von der Leyen arrived on 24 January in New Delhi for a state visit, welcomed by Minister of State for Commerce & Industry and Electronics & IT, Jitin Prasada [Time of India on X]
Updated: January 26, 2026 - 06:02
