The EU and India: Partners, Competitors or Both?

Brussels calls India a “strategic partner” and a cornerstone of its Indo-Pacific vision. Delhi, meanwhile, keeps buying Russian oil, refuses to condemn Moscow’s invasion of Ukraine, and fights the EU tooth and nail over tariffs and carbon rules. That gap between rhetoric and reality is exactly what makes the EU-India relationship worth watching. It is not a marriage, not a divorce, and not even a clean rivalry. It is something messier — and for the UK, something that matters enormously.

A Strategic Partnership Built on Shared Principles — and Divergent Interests

The EU and India have spent two decades building an institutional framework that looks, on paper, like a genuine alliance. In practice, it is a relationship constantly pulled between democratic solidarity and hard national interest.

From Strategic Partnership to Trade and Technology Council

The formal architecture dates back to the 2004 strategic partnership, which elevated a relationship that had previously been mostly economic into something political. Since then we have seen annual summits, a Joint Action Plan, and a dedicated dialogue on human rights. The most concrete recent addition came in 2022, when both sides launched the EU-India Trade and Technology Council (TTC) — a forum modelled partly on the EU-US TTC, designed to coordinate on semiconductors, AI, 5G and supply chain resilience. The EU’s 2021 Indo-Pacific strategy named India as a key partner for a “free and open” region, and the 2023 EU-India Connectivity Partnership followed. On paper, the two sides share a commitment to rules-based order, multilateralism and democratic governance.

The Russia Question and India’s Strategic Autonomy

Then comes the awkward part. India has not condemned Russia’s invasion of Ukraine, has abstained on UN resolutions, and has sharply increased purchases of discounted Russian crude. For Brussels, this is a problem: you cannot claim to defend a rules-based order while funding the aggressor’s war effort. For Delhi, it is simply multi-alignment in action — India’s long-standing policy of keeping strategic options open and refusing to be drafted into anyone else’s bloc. New Delhi points out that Europe has its own history of energy dependence on Moscow. That argument does not persuade many in the European Parliament, but it explains why India will not be talked into alignment it did not choose.

Trade and Investment: Growing Flows, Stubborn Barriers

Economics is where the relationship is most tangible — and most frustrating. EU-India goods trade reached €124 billion in 2023, making the EU India’s largest trading partner. The EU is also a major source of foreign direct investment into India, and Indian firms have deep footprints in Europe. But the numbers hide a negotiation that keeps stalling.

The Elusive Free Trade Agreement

Talks on a free trade agreement first began in 2007 and collapsed in 2013. They were relaunched in 2022 with fresh political momentum, but the sticking points have barely moved. Brussels wants steep cuts to Indian tariffs on cars and wine — duties that can exceed 100% — plus meaningful opening in services and public procurement. India wants easier access for its professionals and cheaper visas for skilled workers. And there is a deeper structural clash: the EU insists on binding sustainability chapters covering labour standards, climate and gender, while India views these as disguised protectionism. Parallel negotiations on investment protection and geographical indications are also grinding along. The result is a deal that everyone says they want, and nobody is close to signing.

Supply Chains, Pharma and the China Factor

Beyond tariffs, the two sides are quietly rewiring supply chains. India supplies a large share of the generic medicines used across Europe, and pharma has become one of the most resilient strands of the relationship. European manufacturers are diversifying away from Chinese production, and India is a natural beneficiary — but only up to a point, since India still depends heavily on Chinese components and raw materials. The China factor cuts both ways, and both Brussels and Delhi know it. Meanwhile, the UK’s own experience is instructive: Tata Steel’s operations in the UK, including the Port Talbot site, show how Indian capital has become embedded in European industrial policy debates about decarbonisation and state support. The UK-India free trade agreement negotiations, launched in 2022, are running in parallel to the EU track — and both sides are watching each other’s progress closely.

Competing for Influence in the Indo-Pacific and Beyond

The Indo-Pacific is where the EU and India most clearly overlap — and where their differences in style become obvious.

Security Alignment Without Alliance

India welcomes European interest in the region but resists a formal EU naval presence. Delhi prefers bilateral defence relationships, particularly with France — a major arms supplier with a permanent UN Security Council seat — and increasingly with Germany. India’s participation in the Quad, alongside the US, Japan and Australia, gives it a security platform that does not require European buy-in. The EU, for its part, has conducted naval exercises in the region and framed its Indo-Pacific strategy around freedom of navigation, but it lacks the military weight to be a decisive player. What we see, then, is alignment without alliance: shared objectives, separate instruments, and no appetite on either side for a treaty-style commitment.

Infrastructure Rivalry: Global Gateway vs. IMEC

Infrastructure is the sharper contest. The EU’s Global Gateway programme is explicitly designed as an alternative to China’s Belt and Road Initiative, offering financing for ports, railways, digital networks and green energy in partner countries. India has its own flagship: the India-Middle East-Europe Economic Corridor (IMEC), announced at the 2023 G20 summit, which aims to link Indian ports to Gulf states and onward to Europe via rail and shipping. The two visions are broadly compatible — and both compete with Chinese Belt and Road projects across South Asia, from Pakistan to Sri Lanka and Bangladesh. Whether they can be stitched together into a coherent alternative to Beijing’s model is an open question, and one that will define the next decade of Eurasian trade geography.

Technology, Data and Climate: New Arenas of Cooperation and Friction

The newest front in EU-India relations is also the most technical — and the one most likely to create headaches for British businesses caught in the middle.

Semiconductors and Digital Sovereignty

The EU-India TTC has prioritised semiconductors, AI and 5G, with working groups on talent, standards and supply chain security. Both sides want to reduce dependence on Chinese chip production and to shape global technical standards. But there is a fundamental philosophical gap: the EU regulates digital markets aggressively through the GDPR, the Digital Markets Act and the AI Act, while India’s Digital Personal Data Protection Act takes a different approach to consent, state access and cross-border transfers. For UK firms operating in both markets — Vodafone is a good example, with major operations in India and across Europe — this means overlapping compliance regimes that do not recognise each other’s adequacy decisions. Data localisation requirements, in particular, create real costs.

CBAM and the Green Transition Divide

Climate cooperation is one of the strongest pillars of the relationship, anchored by the EU-India Clean Energy and Climate Partnership and joint work on solar, hydrogen and grid investment. But the EU’s Carbon Border Adjustment Mechanism (CBAM) has become a serious irritant. India has opposed CBAM at the WTO and in bilateral talks, arguing that it imposes unilateral carbon costs on developing-country exporters — particularly in steel, aluminium and cement — and undermines the principle of common but differentiated responsibilities. Brussels insists CBAM is a climate tool, not a trade barrier. Delhi sees it as both. This is a dispute that will run for years, and it matters well beyond Europe and India.

What This Means for the UK’s EU-India Balancing Act

For Britain, the EU-India relationship is not a spectator sport. The UK is simultaneously negotiating its own trade deal with India, managing its post-Brexit relationship with Brussels, and trying to stay relevant in the Indo-Pacific. Getting the balance right is genuinely difficult.

UK-India FTA vs. EU-India FTA: Complementary or Rival?

The UK-India free trade agreement negotiations, launched in 2022, cover much of the same ground as the EU track: tariffs, services, investment, digital trade. In theory, the two deals could be complementary, creating a broader web of liberalisation. In practice, they compete for Indian attention and negotiating bandwidth, and India may use one as leverage against the other. British firms with dual exposure — Diageo’s spirits business, for instance, faces both Indian tariffs and EU regulatory requirements — have to plan for two sets of rules that may diverge. If the EU clinches its deal first, the UK risks being a rule-taker in a market where it once helped set the terms.

Lessons for UK-EU Relations After Brexit

Our view is that London should coordinate with Brussels where it can, rather than pretend the two tracks are wholly separate. On standards, data flows, carbon accounting and supply chain security, the EU and UK share more interests than either likes to admit. A degree of quiet alignment — on CBAM methodology, on data adequacy, on critical minerals — would strengthen both negotiating positions with Delhi. The alternative is a fragmented Western approach that India can play off, and China can exploit.

• Coordinate, don’t duplicate: align UK and EU technical standards where possible to present a unified front to Delhi.
• Watch CBAM closely: UK exporters in steel and aluminium face knock-on effects from EU carbon rules.
• Protect data flows: mutual adequacy arrangements reduce compliance costs for firms operating across all three markets.
• Think long-term: India’s multi-alignment is not a phase — it is a doctrine.

The EU-India relationship is neither a pure partnership nor a pure rivalry. It is a managed competition — cooperative where interests converge, adversarial where they do not, and always conditional. For the UK, that means the next decade of foreign and trade policy will be defined less by choosing sides than by learning to operate across several at once. We will be watching closely, and so should anyone with exposure to either market.

FAQ

Is India a strategic partner of the EU?

Formally, yes. The EU and India have had a strategic partnership since 2004, reinforced by the 2022 Trade and Technology Council. In practice, the partnership is selective — strong on trade, technology and climate, weaker on security and Russia policy.

Why has India refused to condemn Russia’s invasion of Ukraine?

India’s policy of strategic autonomy and multi-alignment means it avoids taking sides in conflicts that do not directly involve its own borders. It also depends heavily on Russian arms and, since 2022, discounted Russian oil. Delhi argues that Europe’s own historical energy dependence on Moscow weakens the moral case against it.

What is the EU-India Trade and Technology Council?

Launched in 2022, the TTC is a ministerial-level forum covering semiconductors, AI, 5G, digital standards and supply chain resilience. It is modelled partly on the EU-US TTC and is intended to give the relationship a practical, future-facing dimension beyond tariffs.

How does CBAM affect India’s exports to the EU?

The EU’s Carbon Border Adjustment Mechanism imposes a carbon cost on imports of steel, aluminium, cement, fertiliser, hydrogen and electricity. India has opposed it at the WTO, arguing it penalises developing-country producers and conflicts with the principle of common but differentiated responsibilities.

Does the UK’s FTA with India compete with the EU’s?

Partly. Both deals cover similar ground and compete for Indian negotiating attention. We argue the UK should coordinate with the EU on technical standards and carbon rules where possible, so that London is not sidelined in a bipolar trade landscape.