The European Union and India have reached a new free trade agreement that creates one of the largest zones of economic cooperation, covering nearly two billion people. This agreement, announced at the end of long twenty-year negotiations, has been described as historic by several international publications.
Under the agreement, there will be a phased reduction or complete elimination of tariffs on a wide range of goods and services, as well as expanded access to markets for both parties in the areas of investment, digital trade, and services. The European Commission estimates that European companies could save up to four billion euros annually due to the elimination of tariffs, and exports from the EU to India could double in the medium term.
For the European Union, the main aspects of the agreement include the reduction of high Indian tariffs on cars, which currently exceed 100 percent, as well as on alcoholic beverages, including wine and spirits, and machinery and chemical products. These sectors have remained sensitive for European exports for many years and have caused disagreements during negotiations.
India, in turn, will gain more stable and expanded access to the EU market for its products, including textiles, clothing, leather goods, jewelry, seafood, and some agricultural products. Authorities in New Delhi hope that the agreement will help increase exports, attract investments, and create new jobs in export-oriented sectors.
The agreement covers not only the trade of goods but also services such as the financial sector, telecommunications, and the digital economy. It also includes measures for investment protection, sustainable development, environmental standards, as well as simplifying procedures, technical regulations, and intellectual property protection.
Why this agreement is significant
The deal between the EU and India goes beyond tariffs and export quotas. It represents a redistribution of economic influence in a world that is increasingly moving away from the traditional bipolar model.In recent years, the global economy has been focused on the US and China. The former set the rules through financial systems and sanctions, while the latter dominated industry and controlled international supply chains. However, the rise of protectionism and trade wars makes this model increasingly unsustainable.
The deal between the EU and India becomes a response to this crisis.
A new center of power?
The combined market of the EU and India represents nearly two billion people and a significant share of global trade and GDP. In terms of scale and potential, this union is comparable to the largest economic blocs in the world. Importantly, it creates an independent economic framework, free from both Washington and Beijing.This changes the balance of power: the world is no longer a battleground for two economic giants and is becoming more multipolar. For countries and transnational corporations, this means the emergence of alternatives — the ability to choose partners and markets rather than depend on a single center of influence.
Strategic interest of Europe
For the EU, the agreement with India represents an attempt to regain strategic autonomy. The European economy has been under pressure from American protectionism and Chinese industrial dominance. India is becoming an important market, a platform for diversifying production, and a partner in long-term projects — from the digital economy to "green" transformation.Thus, the EU is creating a reserve in case of future trade conflicts and reducing dependence on a single direction of foreign economic ties.
India steps onto the international stage
For India, this agreement symbolizes a transition from the status of a "promising developing market" to that of a systemic player on the global stage. Privileged access to the European market strengthens the country's economy, enhances its investment attractiveness, and increases its political weight. India demonstrates its readiness to engage in an equal dialogue with the leading economies of the world and to formulate its own strategy without being in a rigid dependence on one of the global centers.Impact on the US and China
Although the agreement is not directed against any countries, its consequences will affect both China and the US. China will face increased competition for investments and supply chains, while the US may lose part of its role as the main economic arbiter.This is not about losing leadership, but about the gradual loss of monopoly on setting the rules of global trade.
What the agreement between the EU and India means for Central Asia
The free trade agreement between the EU and India does not directly concern the countries of Central Asia; however, its consequences for the region will be significant. This is primarily related to transit, competition in markets, and changing interests of major players in the region.The increase in trade between the EU and India objectively creates demand for reliable and diversified logistics routes. Central Asia, in turn, has the opportunity to strengthen its role as a link between Europe and South Asia.
This primarily concerns the development of the Trans-Caspian International Transport Route and other corridors through the regions of Central Asia. The higher the volume of trade between the EU and India, the greater the interest in land routes as an alternative to congested maritime routes and areas of geopolitical instability. This could lead to an influx of investments in transport infrastructure and related services.
The agreement between the EU and India also opens new opportunities for Central Asian countries in their foreign economic policy.
The region gains additional arguments in negotiations with both Europe and India regarding transit, investments, and participation in regional supply chains.
With the right policies, Central Asian countries can take advantage of the increase in trade between the EU and India to integrate into new logistics and production chains.
Thus, for Central Asia, the agreement between the EU and India is neither a threat nor a guaranteed benefit, but rather a window of opportunities. The key factor will be the ability of the countries in the region to adapt to the new multipolar economy and to use their geographical position as an economic resource.
