EU-India Partnership Explained: How New European Strategy Tackles Trade, China-US Rivalry Challenges

The European Union has unveiled a new strategy aimed at reinforcing prosperity and security with India. The Joint Communication to the European Parliament and the Council outlines five focus areas being, prosperity and sustainability, technology and innovation, security and defense, connectivity and global issues, and enabling mechanisms across these pillars.

Rather than positioning Europe's“Competitiveness Compass” in conflict with India's“Atmanirbhar Bharat” vision, the document commits Europe's regulatory expertise, access to its single market, and joint innovation to support India's sustainable growth path.

The new strategy coincides with India-EU negotiations for a comprehensive Free Trade Agreement (FTA). India's Commerce Minister Piyush Goyal stressed that it is important“not to let the search for a perfect deal become the enemy of progress,” calling the talks“extremely positive.” His optimism was echoed by EU Commissioner for Trade and Economic Security Maros Sefcovic, who said the negotiations had reached unprecedented levels of“seriousness, mutual trust, and shared ambition,” with efforts focused on concluding them by the year's end.

Trade Ambitions Driving India-EU Strategic Convergence

The emphasis on an FTA reflects the vast but underutilized potential of India-EU ties. In 2024, trade in goods reached 120 billion euros, almost doubling over the last decade, while services trade rose to 60 billion euros. Around 6,000 European companies currently operate in India, with EU foreign direct investment reaching 140 billion euros in 2023, nearly double the level five years earlier. Yet India still accounts for only 2.5 percent of the EU's total trade, reflecting room for growth.

The Joint Communication identifies this gap as“significant untapped potential” between“natural strategic partners,” particularly in a climate marked by“weaponization of dependencies, unilateral trade practices, and widening economic asymmetries.” The strategy, therefore, frames India-EU cooperation as not only economically beneficial but also strategically necessary.

These references gain sharper meaning when viewed against the backdrop of the ongoing China-U.S. tech rivalry, which has disrupted supply chains and increased global compliance pressures.

Technology Partnerships Shaped By Global Rivalries

China's April 2025 decision to require licenses for exports of rare earth minerals and magnets highlighted the fragility of supply chains. Unlike Beijing's December 2024 ban on exports of gallium, germanium, and antimony directed at the U.S., the April move had a global effect, showing China's readiness to weaponize its dominance in critical minerals.

At the same time, Washington has continued bipartisan restrictions on China's access to U.S.-made semiconductors and chip-making equipment. Third countries have faced pressure to enforce these rules, with Malaysia requiring permits for re-export of U.S. AI semiconductors and Singapore acting against firms allegedly routing Nvidia chips to China's DeepSeek. The Trump administration has extended these demands to Dutch and Japanese companies, even though both had already aligned export rules with U.S. mandates.

These developments directly shaped the EU's new approach. The Joint Communication with India emphasizes the need to“implement robust measures to prevent the unauthorized transfer or misuse of sensitive technologies and knowledge.”

The alignment with India on technology reflects a broader global trend, like-minded states forging long-term partnerships to secure supply chains while advancing indigenous capacities. For both sides, the rivalry between Washington and Beijing has made cooperation urgent and strategic.

The EU-India Trade and Technology Council (TTC), established in 2022, has already served as a platform to identify areas of convergence at the intersection of trade and technology. The new strategy recommends prioritizing the EU-India Semiconductor Agreement, joint work on green technologies, and an early-warning system for pharmaceutical ingredients.

It also highlights collaboration on research, innovation, and skills development. Proposed initiatives include“EU-India Innovation Hubs” and“Blue Valleys” to align standards, facilitate investments, and connect stakeholders across sectors.

India's successful experience with Digital Public Infrastructure (DPI) platforms offers further ground for collaboration. Under its“Digital India” program, India has expanded digital authentication and financial inclusion, boosting its start-up ecosystem in fintech, healthtech, and edtech. The EU strategy acknowledges this success as a foundation for joint innovation with European ecosystems.

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