Executive Brief
As the EU seeks to diversify away from China and India looks West for technology and investment, the India-EU strategic partnership is gaining momentum — but trade negotiations, carbon policy, and differing worldviews on Russia remain obstacles.
Key Takeaways
As the EU seeks to diversify away from China and India looks West for technology and investment, the India-EU strategic partnership is gaining momentum — but trade negotiations, carbon policy, and differing worldviews on Russia remain obstacles.
- India-EU bilateral trade reached $135 billion in 2025, making the EU India's second-largest trading partner
- Free Trade Agreement negotiations, relaunched in 2022 after a 9-year pause, remain deadlocked over tariffs, data adequacy, and intellectual property
- The EU's Carbon Border Adjustment Mechanism (CBAM) could cost Indian steel and aluminium exporters $2-4 billion annually if implemented fully
- India's continued energy imports from Russia post-Ukraine conflict has created friction with several EU member states
- The India-Middle East-Europe Corridor (IMEC), announced at the 2023 G20, offers a transformative connectivity alternative to China's BRI
Evidence
The EU's CBAM will help India decarbonise its heavy industry.[1]
Moderate78%Supporting Evidence
- While CBAM may incentivise cleaner production, it acts as a de facto carbon tariff. Indian steel and aluminium exports face 20-35% additional costs. India has raised concerns at the WTO about CBAM violating common but differentiated responsibilities (CBDR) under the Paris Agreement.
Citations
Report1
The India-EU FTA will be concluded by 2025.[1]
Unverified85%Supporting Evidence
- As of mid-2026, the FTA remains unratified. Key sticking points persist on EU demands for lower auto and wine tariffs, stricter IP protections (data exclusivity for pharmaceuticals), and India's insistence on easier visa access for professionals and data adequacy status.
Citations
Report1
Key Numbers
$135 billionIndia-EU Trade (2025)European Commission
$120 billion+EU FDI into India (cumulative)DPIIT
1.2 lakh+Indian Students in EuropeUNESCO
16.5%EU as % of India's ExportsDGFT
9 (since 2022 relaunch)FTA Negotiation Rounds CompletedEC Trade
Timeline
India-EU Bilateral Trade ($ Billion)
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Frequently Asked Questions
Sources
International
Industry
Evidence & Confidence Summary
88
Confidence Score
Strong Evidence
0/2 claims verified
0 Verified2 Unverifiable