Ranbir Singh Pathania
rspathaniamla@gmail.com
When European Commission President Ursula von der Leyen spoke in a celebratory tone of India and addressed Prime Minister Narendra Modi as “my friend”, it was not just diplomatic warmth. It was recognition of a strategic shift. India and the European Union – a bloc of 27 nations – have ultimately moved decisively towards a comprehensive Free Trade Agreement (FTA), signalling one of the most quintessential economic realignments of this decade.
Let us understand it in the simplest possible terms.
A free trade agreement essentially means fewer taxes, fewer barriers, and smoother movement of goods and services between economies.
From Indian perspective, this connotes four immediate corollaries.
First, Indian companies will be able to export more to Europe because Indian goods become more competitive. From automobiles and engineering goods to pharmaceuticals, textiles and electronics, Indian manufacturing gains access to a large, stable, high-value market. Let us take the case of car import duties – expected to fall from ~70-110% to ~40%, initially, and ultimately as low as ~10%. This opens up India’s auto market to EU players like Audi, VolksWagon, Skoda, BMW, Mercedes, Maserati, etc. Indian customers would now get these luxury brands at cheaper rates.
Second, it makes it easier for Indian professionals and companies (IT, fintech, healthcare, consultants, etc.) to work and do business in Europe. Professionals can move more easily as contract workers, independent experts, company transferees, and business visitors. Indian exports will increase, tariffs will reduce, and foreign investment will rise. It opens doors to a huge EU market (worth about $27 trillion).
Third, Indian consumers benefit as European products enter India at more affordable prices, improving quality and choice.
Fourth, sensitive sectors like agriculture and dairy products are largely excluded for now. This protects domestic farmers and avoids politically sensitive disruptions.
In short, India produces more, sells more, earns more – and grows faster. Moreso, India will get imports at a relatively cheaper rates due to lesser/nil excise duties and allied taxes/tariffs.
European Union had earlier withdrawn GSP tariff benefits for India. This FTA helps restore long-term tariff advantages for Indian exporters.
Why This Is Bigger Than One Agreement
The agreement has been rightly called as ‘mother deal of all trade deals’. The India-EU FTA is not a standalone event. It is part of a deliberate and consistent trade strategy.
India’s trade blitz is methodical. India has already concluded a trade agreement with the United Kingdom. Negotiations with multiple partners across West Asia and the Indo-Pacific are progressing steadily. Washington’s mini-deal on minerals and defence (November 2025) hints at a full-fledged US pact soon. Moreso, USA has itself confirmed that an India-US trade agreement is on the horizon.
Taken together, these agreements quietly push the fear and stigma of arbitrary tariffs and protectionism into the background. India is no longer knocking on the doors of global markets – it is helping design the doors.
Why Europe Needs India – And Why India Is Ready
Europe today faces slowing growth, ageing populations, energy transitions and supply-chain vulnerabilities. India offers exactly what Europe needs – a young, vibrant workforce, a fast-growing consumer market, and a reliable democratic partner rooted deep its institutional strength and simple labour laws. India, in return, gains technology, capital, investment confidence and long-term market access – without surrendering strategic autonomy.
This is the defining difference between the India of the past and the India of today.
From 1991 to 2047: A New Economic Chapter
The reforms of 1991 opened India to the world.
The current phase pitches and projects India as a rule-shaper rather than a rule-taker.
Non-alignment has ultimately evolved into strategic autonomy. Hesitation has given way to confidence. Economic engagement is now in sync with national interest. With a clear national vision of India@2047, trade agreements are no longer just commercial documents. They are instruments of economic and strategic power.
Davos and the Contrast of Global Moods
At Davos, we saw contrasting global approaches.
One pole was for aggressive economic nationalism and transactional politics. Another was for moral leadership and multilateral idealism.
India charted a ‘road not taken’ – grassrootslevel work without rhetoric.
By leveraging its leadership of the Global South, its G20 legacy and its economic momentum, India demonstrated that quiet confidence now carries greater weight than loud declarations.
Liberalisation cracked open our economy. Now, “Viksit Bharat @2047” turns trade into strategic steel.
What This Means for the Common Indian
Trade agreements are not abstract diplomacy. They touch everyday lives.
They mean more jobs, stronger manufacturing, globally respected Indian services, better products at competitive prices, and sustained economic growth.
The Larger Than Life Picture
This moment may well be remembered as the second great economic turning point after 1991.
India is no longer merely integrating with the global economy. It is helping reshape it on its own terms.
Europe’s bet on India is not symbolic. It is strategic. We’re no longer the next big thing- we are the thing. Ready, resilient, rising.
And India, confident in its economic strength and strategic autonomy, is ready for the role it has long prepared for.
(The columnist is member of J&K Legislative Assembly.)
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