India and Europe: Building a Shared Global Future?

The 16th European Union (EU)-India Summit, scheduled for the day after India’s Republic Day, is a critical political signal and will mark a new chapter in a long and often underutilised relationship. That EU Commission president Ursula von der Leyen attending the Republic Day parade as guest of honour, along with European Council President Antonio Costa, underscores New Delhi’s intent. This follows a recent visit by German Chancellor Merz and India’s participation in the Weimar Meeting, along with numerous exchanges with other European countries.

The summit could prove historic, as the EU and India are expected to finally sign a free trade agreement (FTA) after two decades of negotiations. Such a deal would benefit over two billion people, with trade volumes likely to surpass today’s €165 billion annually, and would rival even the EU’s near-completed Mercosur agreement.

In an increasingly fragmented global environment, an EU-India FTA, along with other agreements on defence and security, technology and mobility and others, would send a powerful signal that cooperation based on rules, standards, market access, and mutual trust remains possible. But a trade agreement is not the end goal. It´s a starting point – for the question of whether Europe and India will become more effective partners in the coming decade, or whether the relationship will once again fail due to expectations that sound good politically but are not met.

Crucially, this partnership must not be framed as an “anti-Trump” or “anti-China” project. It should stand on its own merits – strengthening innovation, economic resilience, and supply chains, while enabling cooperation on digitalisation, development and data sovereignty.

However such a partnership requires investment and demands political courage to set joint priorities – from industrial cooperation and technology projects to training and research networks. Priorities that can have positive cascading effects in an era that needs new bold thinking.

Nevertheless structural differences remain stark. India is growing rapidly, demographically and economically, while Europe is ageing. At the same time OECD data show average annual income in India at under €2,500 in 2024, compared to around €50,000 in Germany or around €18,000 in Hungary at the lower end. While both support a rules-based international order and are proponents of the UN-system, divergent approaches – most visibly toward Russia – remain a challenge. Therefore the EU-India partnership needs more than harmony. In both directions it needs the ability to withstand criticism without immediately labeling it as “interference” or “moralism” and even more important: the willingness to understand and learn from each other.

The Free trade agreement will therefore be a stress test, not only for trade, climate, and industrial policy (such as CBAM), but also for cooperation in reshaping global norms, institutions and actions. At the same time, it opens opportunities for joint solutions in humanitarian assistance and disaster relief, climate resilience, energy, and digital infrastructure. In all these fields both could benefit from export successes as they foster new relationships around the world at the end.

To succeed, this agenda requires trust building at various levels and dense Indo-European networks that help boost deeper understanding on both sides. Europe will not share India's priorities in security, growth, and social development if it does not understand them. India will not take Europe's regulatory logic seriously if it is perceived as a mere market barrier.

This will not be possible without mobility and therefore reforms of the visa-systems. And it needs exchange not only at the highest political and bureaucratic level but also between industry, SMEs, academia and sciences, mayors, arts and culture scene and journalists. India will need to step out of its hesitancy and often guarded foreign policy to work more actively with the EU and partners within. Conversely, Europe will have to accept that India's transitions require time, access to technology, innovation and funding, and also see India as a truly equal partner.

If Delhi and Brussels see January 27 as a starting point for all this, the trade agreement could become more than a deal: It could become a strategic turning point and a signal for a cooperative, resilient, and future-oriented globalisation.

Michael Scharfschwerdt, Senior Advisor Geopolitics, Kearney, and former Head of Policy Planning, German Federal Foreign Ministry.

Ambika Vishwanath is the Co-Founder and Director of Kubernein Initiative, India, and a Principal Research Fellow with LaTrobe Centre for Global Security, Australia.

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