Why Brussels May Matter More Than Washington

The spotlight often moves toward Washington when India has any significant engagement.

This is true of the recent past even as the newly concluded India-EU Free Trade Agreement demands equal, if not greater, attention. It is structural economics unfolding at continental scale.

The American initiative appears driven in part by competitive liberalisation, as the U.S. industry grew wary of losing commercial ground in India after New Delhi’s pact with Europe.

Yet, the noise was always going to be about Washington. Cameras swing to America. Panels get convened. Strategic commentary follows a familiar script built around access, sovereignty, defence, countering China, the Indo-Pacific security alliance etc.

But, for a moment, let us step back from the spectacle.

The combined effect of the two agreements could push India toward an almost fully open trade regime. Tariff protection may remain concentrated mainly in agriculture, even as new export opportunities expand for India’s labour-intensive manufacturing sectors.

I believe, the more structurally important economic development for India may be the one anchored in Brussels.

The India-EU Free Trade Agreement links India to the largest trading formation in the world. Twenty-seven countries. Nearly half a billion consumers. A combined GDP exceeding 16 trillion dollars. Never before have we had market access at continental scale.

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Trade That Reshapes Production Logic

Europe is already India’s largest trading partner in goods.

Bilateral goods trade crossed roughly 136 billion dollars in the last financial year. Services, investments and technology flows push the engagement far deeper than merchandise trade alone. The FTA alters the operating environment around that trade.

Tariffs are expected to be eliminated on close to 97 percent of EU exports to India and nearly 99 percent of Indian exports entering European markets over phased timelines.

Indian pharmaceuticals, auto components, speciality chemicals, engineering goods and textiles are all set to gain. Sectors earlier slowed by tariff barriers and compliance friction now find smoother entry into premium markets. European industry gains diversification.

For years, supply chains leaned heavily on China, which still accounts for significant shares of EU industrial imports. That concentration is now viewed as strategic vulnerability rather than efficiency. India becomes the alternative manufacturing and sourcing base Europe needs but has struggled to scale quickly. This is supply chain rebalancing. Geopolitical consequences follow naturally.

The Demographic Reality

Population trajectories sharpen the partnership logic. The European Union’s median age now exceeds 44 years. Workforce contraction has begun across several member states.

India’s median age sits around 28 years. More than 65 percent of India’s population is below 35. Some 400 million Indian youth are below 20 years of age. Millions will enter the workforce each year for the next two decades.

Europe faces shortages in healthcare staffing, engineering services, digital systems architecture and advanced technical roles. Germany alone is projected to require hundreds of thousands of skilled foreign workers annually to stabilise productivity. India produces that talent pool at scale.

Structured mobility expands opportunity for Indian professionals while cushioning European demographic decline. Income flows return home. Skills circulate. Economic interdependence deepens. Demography becomes economic joy.

Climate Alignment Is Structural

Sustainability gives the partnership long-term depth. The EU is legally committed to net-zero emissions by 2050. India has set a 2070 net-zero target alongside a 500 GW non fossil fuel capacity goal by 2030.

India is already among the fastest growing renewable energy markets globally. Solar capacity alone has expanded more than tenfold over the past decade. Large transitions require financing and technology depth.

European green funds, development finance institutions and climate technology firms become critical partners in scaling India’s transition affordably. Joint work across green hydrogen, offshore wind, battery storage and carbon compliant manufacturing lowers adjustment costs for exporters on both sides. Climate cooperation moves to industrial strategy.

Digital Convergence Is Underestimated

One of the least discussed layers of the agreement sits in the digital domain. India’s digital public infrastructure now processes billions of real time financial transactions every month. Payment volumes on UPI rival global networks in scale.

Europe has focused on governance architecture. Data protection regimes. Competition law. Platform accountability frameworks. As trade and services integrate, digital systems require interoperability.

These are of myriad types .Fintech corridors. Trusted health data exchange. AI deployment norms. Cybersecurity standards and more So, regulatory and infrastructure alignment across India and Europe will shape digital governance thinking far beyond borders.

Political Resonance Runs Deeper

There is also a structural political parallel. Europe is still learning how to function as one cohesive unit. Different fiscal cultures. Different political histories. Uneven growth patterns.

India manages even greater diversity every day across states that vary widely in economic standing, population, language etc.

The EU aspires towards cohesion. They see India manages it in real time.

Strategic Autonomy Finds Convergence

Geopolitics frames the outer edge of the partnership.

Europe is reassessing structural dependencies across energy, manufacturing and technology systems. India has long avoided single axis alignment, maintaining working relationships across competing power centres.

As it becomes more difficult, that strategic flexibility now finds resonance in Brussels. Trade architecture often becomes the base layer on which technology collaboration, defence industry engagement and maritime coordination gradually build.

Why This Pact Matters

The India-US partnership will remain critical, particularly in defence technology and Indo-Pacific regional security. That foundation will continue to deepen.

The EU partnership spans a broader economic canvas. Market access worth hundreds of billions. Manufacturing integration. Talent mobility pipelines. Climate financing. Digital standards and regulatory alignment.

It links India’s growth momentum with Europe’s institutional depth. India is expanding. Europe is stabilising.

The Quiet Structural Shift

This effects of the pact will surface gradually. In investment flows. In factory siting decisions. In professional mobility. In green capital deployment. In digital rule making forums. India and the European Union together account for nearly 25% of global GDP and close to two billion people.

When economic corridors of that scale deepen integration ,over time, that structural shift may prove more consequential than partnerships that dominate headlines but operate on narrower foundations. A for America, B for Brussels may not be in that order.