The conclusion of the India-European Union free trade agreement comes at a moment when the global trading system is under severe strain, shaken by geopolitical rivalries, economic nationalism and the increasingly unpredictable use of tariffs as political weapons. Since Donald Trump’s return to the White House, the world economy has been grappling with renewed instability.

His aggressive “America First” trade posture, marked by sweeping tariff hikes against allies and competitors alike, has disrupted supply chains, fuelled inflation, and injected uncertainty into global markets. Ironically, the very countries Trump seeks to pressure ~ India and members of the European Union ~ have responded not by retreating inward, but by deepening cooperation with each other. In that sense, the India-EU FTA is not merely a trade deal; it is a strategic statement about how major democracies intend to navigate an increasingly fractured world.

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Trump’s weaponisation of tariffs has had consequences far beyond his intended targets. While he promised American voters cheaper goods and economic revival, the reality has been rising costs of living within the US itself, as tariffs pushed up prices and invited retaliation. India and Europe have both found themselves at the receiving end of this approach. Washington imposed a punishing 50 per cent tariff on Indian goods, including a 25 per cent penalty linked to India’s purchase of Russian oil, despite New Delhi’s insistence that it has significantly reduced such imports. Europe, meanwhile, has been subjected to relentless pressure, including threats of tariffs and even extraordinary demands such as pressuring Denmark over Greenland.

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Against this backdrop of coercive economics, the India-EU FTA appears as a deliberate attempt to reclaim agency and stability. Although Indian officials publicly deny that US pressure played a role, it would be naïve to ignore the catalytic effect of Trump’s policies. Negotiations........

© The Statesman