Can trade anchor India–EU relations in a multipolar world?

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In this episode of Do Better Podcast, Senior Researcher and Research Coordinator at EsadeGeo Marie Vandendriessche speaks with Amrit Singh Deo, Senior Managing Director at FTI Consulting and alumnus of the Full Time MBA at Esade, about India’s economic rise and its evolving role in an increasingly fragmented geopolitical landscape.

The conversation explores India’s growth story, its pursuit of strategic autonomy in foreign and security policy, and the renewed momentum behind the long-negotiated EU–India Free Trade Agreement (FTA). Particular attention is given to the main sticking points in the talks—agriculture, energy and climate policy (including CBAM), and services—alongside the opportunities emerging from closer cooperation on the energy transition, defense, technology, and connectivity.

1. India’s economic trajectory and development model

India has emerged as the world’s fourth-largest economy, surpassing Japan, with GDP exceeding USD 4 trillion. Its growth model is underpinned by strong domestic demand, with consumption accounting for approximately 60 % of GDP, and by a large, young population of around 700 million people under the age of 28. This demographic dividend is accelerating urbanization and the shift from an agrarian economy toward industry and services.

Despite persistent infrastructure gaps and the need for further regulatory reform, the overall momentum is structural rather than cyclical. Growth is driven less by short-term political stimulus and more by long-term changes in productivity, labor markets, and consumption patterns, creating a broadly optimistic outlook.

2. Political context and foreign policy orientation

India’s domestic political environment reflects global trends toward greater protectionism and a hard rightward shift in political discourse. At the same time, policy remains pragmatic. Indian leadership recognizes that sustained growth requires open trade, access to global markets, and international collaboration.

Over the past decade, this pragmatism has translated into a more self-confident and autonomous foreign policy. India increasingly seeks to define its own positions rather than align automatically with any major power bloc, reinforcing its image as an independent pole in a multipolar system.

3. Security and defense: strategic autonomy in practice

India is one of the world’s largest importers of defense equipment, reflecting both its security environment and its historical reliance on foreign suppliers. Traditionally, defense procurement has been closely linked to Russia, a legacy of Cold War–era ties that continues to shape current capabilities.

At the same time, India has expanded defense relationships with the US and European countries. This diversification is not aimed at replacing one partner with another, but at preserving strategic autonomy. By maintaining multiple defense partnerships, India avoids overdependence on any single actor and reinforces its ability to act independently in regional and global affairs.

4. The EU–India free trade agreement: delayed but re-energized

Negotiations on the EU–India free trade agreement have been ongoing since 2007, with repeated delays reflecting differences in development levels and economic priorities. The most sensitive areas have included agriculture, steel, automobiles, services, and energy.

• India has prioritized protecting employment-intensive sectors and maintaining policy space for domestic development.
• The EU has pushed for faster market opening and deeper regulatory alignment.
• Services and labor mobility, particularly in engineering, medicine, and accountancy, are central demands for India.

Recent geopolitical shifts and greater regulatory convergence have renewed momentum behind the negotiations, even if key trade-offs remain unresolved.

5. Climate, energy security, and CBAM

Climate and energy policy represent both a constraint and a catalyst in EU–India relations. The EU’s Carbon Border Adjustment Mechanism (CBAM) poses challenges for Indian exports, especially in energy-intensive sectors such as steel.

India’s cautious approach to rapid decarbonization is rooted in energy security concerns. The country remains heavily dependent on imported energy, including oil, gas, and coal, which constrains the speed at which it can transition away from fossil fuels without risking economic disruption.

While India supports climate action in principle, it emphasizes a gradual, staged transition. The planned introduction of a domestic carbon trading mechanism from 2026 marks a significant step toward regulatory convergence with the EU and may help reduce friction over CBAM in the medium term.

6. Opportunities for deeper EU–India cooperation

Beyond the FTA, EU–India relations offer substantial opportunities for strategic and economic cooperation across multiple sectors:

• Energy transition initiatives, including green hydrogen and offshore wind.
• Defence industrial collaboration and local manufacturing in India.
• Circular economy partnerships and greater supply chain transparency.
• Cooperation in technology, semiconductors, space, and cybersecurity.
• Strategic connectivity projects such as the India–Middle East–Europe Economic Corridor (IMEC).

These areas reflect complementary strengths and shared long-term interests rather than purely transactional trade objectives.

7. Outlook: gradual convergence in a multipolar world

Despite remaining challenges, EU–India relations are moving toward closer strategic alignment. Shared commitments to trade, democracy, and openness provide a common foundation, even as differences persist on pace and priorities.

Progress is likely to be incremental rather than transformative in the short term. However, over the next decade, deeper cooperation across trade, energy, security, and technology could anchor a more durable EU–India partnership within an increasingly multipolar global order.