As this is being written, European Commission President von der Leyen and European Council President Costa are attending Republic Day, a yearly parade in India that is usually reserved for formal heads-of-state at the invitation of its Government. This is a major historical event and a sign of the close relationship being formed between Brussels and New Delhi, ushering in a landmark moment for the EU-Indian relationship.
This year has started badly for both the EU and India, particularly from the prism of geopolitics. While the EU has an ongoing war on its Eastern border between Ukraine and Russia, India is recovering from a pyrrhic victory over Pakistan - which has formed a strengthened alliance with close US ally Saudi Arabia. A growing, shared challenge has also emerged: the increasingly erratic foreign policy approach of President Trump. Could this be the solution to the numerous problems facing both sides?
The “Biggest Deal Ever Made”
President Trump imposed a 50% tariff on Indian goods last year over New Delhi’s imports of Russian oil and close involvement in BRICS. Now, President Trump is holding further tariffs over India’s head to impose Washington’s geopolitical vision on New Delhi. During Davos, he claimed to have President Modi’s word that a deal was on the cards - a claim swiftly denied by the Indian Government.
The EU thought that the sky had cleared from the storm of President Trump’s making, with the “biggest deal ever made” - at least according to him - which imposed a 15% tariff on EU goods and required it to invest over $1.25 trillion in the US. But that was to underestimate the unpredictability of President Trump. After abducting Venezuelan President Maduro, his eyes turned to Greenland and, along with Greenland, back to the EU.
Although President Trump appears to have backed down following widespread condemnation of his renewed threats to annex Greenland, a territory of Denmark, the crisis is far from over and the existence of NATO, along with the transatlantic relationship, is increasingly under question. French President Macron summarised the thoughts of most Europeans when he said at Davos that the US “openly aim to weaken and subordinate Europe” by threatening its territorial sovereignty. The so-called “biggest deal ever made” is now frozen.
Brussels and New Delhi are both searching elsewhere for partnerships that are powerful and more resilient than their existing ones with the US. Going beyond the typical Western-Eastern divides, both sides have been sending out signals of rapprochement. With speeches expressing goodwill and visits to New Delhi from German Chancellor Merz, President Macron, and now Presidents von der Leyen and Costa, as well as a reciprocal visit to Paris and an upcoming visit to Rome to meet Prime Minister Meloni, the “mother of all deals” - as coined by Indian media - is now seeming highly possible.
The “Mother of All Deals”
If a trade agreement is signed, it would encompass over 2 billion people and represent a combined GDP that would offer a serious challenge to American or Chinese claims of hegemony. The magnitude of this agreement lies in its ability to reconcile the seemingly irreconcilable. For years, the negotiations were a graveyard of ambitions, buried under technical disagreements and protectionist reflexes on both sides. But the geopolitical shocks of past months have acted as a catalyst.
At the heart of the provisional “mother of all deals”, a breakthrough in the automotive industry would mark the end of a long-standing cold war of tariffs. By slashing duties on EU vehicles and components, India would not simply be opening its market but integrating into a high-tech supply chain that bypasses the volatility of America’s. In exchange, the EU has proposed a huge investment framework, moving beyond basic trade relations to a mutual development of each other’s economies.
Furthermore, a close analysis of the proposals shows that the EU and India’s proposals on environmental standards and labour rights would far exceed any expectations. Successfully navigating the friction of the Carbon Border Adjustment Mechanism, it offers India technology-sharing and recognition of its sustainability efforts. Equally importantly, clauses dedicated to solar panels and renewable energy systems are included, while the digital chapter would ensure a free flow of data with trust, essential for the AI revolution.
To achieve such a historic result, the negotiators had to make a pragmatic decision to exclude agriculture. With food security interconnected to national security in the eyes of many in the EU and India, including the plough would have meant the death of the chip. By sidelining the agrarian dispute, Brussels and New Delhi have prioritised the digital and strategic sectors in the hope of avoiding a repeat of the Mercosur deadlock.
Beyond the movement of goods, the deal would forge a new strategic architecture through an unprecedented defense and investment protection framework. The EU-Indian partnership has evolved into a security necessity for both sides. The agreement facilitates a deep military-industrial cooperation beyond what already exists, particularly between India and France, extending from the co-production of maritime surveillance technology to the joint development of space-based assets.
Europe’s Next Steps
Under the doctrine of strategic autonomy, India has transitioned from being a balancing power to a leading power. As it assumes the head of BRICS in 2026, New Delhi is simultaneously hosting EU leaders and coordinating an expanded bloc of developing countries. This is not a case of sitting on the fence, but based on its Friend of the World policy. India sees itself as the bridge between East and West and North and South, simultaneously cooperating with Moscow, Beijing, Washington, and Brussels, in addition to bilateral relations with EU member states.
Yet, while India acts clearly, the EU remains trapped in its own complexities. As President Zelensky pointed out at Davos, Europe risks remaining a "kaleidoscope of small powers, a beautiful but fragmented arrangement”, shifting with every external shock. The Greenland crisis and the ongoing war in Ukraine have exposed the fragility of the regulatory superpower model. The EU can write the world’s best rules on carbon or AI, but that matters little in a world that values demonstrations of power above all else.
The Republic Day parade must be a wake-up call for the EU. The roaring Rafales - symbols of EU-Indian industrial strength - prove that the technical capacity for a true partnership exists. What is missing is the psychological change required in Brussels. If the threat of a detached America and a predatory China finally forces European leaders to trade their kaleidoscope for a focused lens of sovereign will, then this new beginning might just save the continent’s future. The preparations for the parade are picking up speed over the Rajpath. India has shown its hand. It is now up to Europe to decide if it has the courage to win at this game.
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