India–EU ties: A realignment taking shape

𝗕𝗲𝘆𝗼𝗻𝗱 𝗕𝗶𝗹𝗮𝘁𝗲𝗿𝗮𝗹: 𝗔 𝗤𝘂𝗶𝗲𝘁 𝗥𝗲𝗮𝗹𝗶𝗴𝗻𝗺𝗲𝗻𝘁 𝗧𝗮𝗸𝗶𝗻𝗴 𝗦𝗵𝗮𝗽𝗲 This isn’t just about stronger India–EU ties. It’s about a broader global realignment, one that’s reshaping trade, investment, and trust. When currencies appreciate steadily, they signal more than just cyclical shifts. They reflect investor confidence in governance, stability, and long-term growth. The euro’s recent climb (averaging 1.10 against the USD and peaking at 1.1416 in July) is one such signal. Quietly but steadily, trust is flowing into Europe.   As the US turns inward with protectionist tariffs on India, China, Mexico, and Canada, businesses are seeking the next best partner. Europe is emerging as the natural “US+1” — offering policy predictability, institutional strength, and complementary economic fundamentals. 𝗙𝗼𝗿 𝗜𝗻𝗱𝗶𝗮, 𝘁𝗵𝗶𝘀 𝗶𝘀 𝗮 𝗺𝗼𝗺𝗲𝗻𝘁 𝗼𝗳 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗼𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝘆 • Our bilateral trade with the EU reached ~$137 billion in FY24–25, making it India’s largest export market, marginally higher than US which is at ~$130 billion. • A stronger euro and ongoing structural reforms in Europe are enhancing the global competitiveness of Indian exports, even as the rupee strengthens in real terms. • European FDI has crossed €120 billion, focused on green energy, digital infrastructure, and advanced manufacturing. • And critically, the relationship is evolving from trade to shared priorities in technology, resilience, and strategic autonomy.   What may appear as a minor crisis caused by US tariffs and protectionism could in-fact end up accelerating India’s efforts to de-risk, diversify, and deepen its global partnerships.    The India–EU Free Trade Agreement (FTA), could become a defining agreement of this decade, opening up not just markets, but frameworks for regulation, capital mobility, and innovation sharing. In a world that’s de-risking from supply concentration and rethinking old alliances, Europe and India offer complementary strengths. Europe brings capital depth, tech and innovation whereas India brings scale, speed, and a digital-first consumer base.     For Indian markets, this means stable and patient foreign capital inflows, improved liquidity, access to advanced technologies, regulatory collaboration, and expanded exports — 𝗮𝗹𝗹 𝗰𝗿𝘂𝗰𝗶𝗮𝗹 𝗳𝗼𝗿 𝘀𝘂𝘀𝘁𝗮𝗶𝗻𝗲𝗱 𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝗴𝗿𝗼𝘄𝘁𝗵 𝗮𝗺𝗶𝗱 𝗴𝗹𝗼𝗯𝗮𝗹 𝘂𝗻𝗰𝗲𝗿𝘁𝗮𝗶𝗻𝘁𝗶𝗲𝘀. #EURvsUSD