Tensions surrounding American trade policies are pushing the European Union to seek new partnerships, with India positioned as a potential strategic ally. This development was underscored during the recent visit of European Commission President Ursula von der Leyen to New Delhi on February 28, 2025. This was the Commission's inaugural trip outside of the EU since assuming office, signaling a significant pivot toward India as the EU adapts to the pressures of a shifting global trade environment.
Both von der Leyen and Indian Prime Minister Narendra Modi emphasized their intent to establish a free trade agreement by the end of the year. "Oggi – ha aggiunto il premier indiano – abbiamo deciso di creare una tabella di marcia coraggiosa e ambiziosa per il partenariato India-UE," indicating the joint commitment toward this ambitious partnership.
The negotiations for such a trade deal were resumed in 2021 after being stalled for eight years, underscoring the urgency as both parties recognize the shifting dynamics due to the strained trade relationship with the United States, particularly under tariffs the Biden administration is contemplating. Since 2022, the European Union has ascended to being India's foremost trading partner, surpassing China, with bilateral trade reaching approximately $137.41 billion for goods and $51.45 billion for services during 2023-24.
India imports advanced machinery, vehicles, and chemical products from the EU, whereas its exports comprise machinery, pharmaceuticals, and textiles. The establishment of the Trade and Technology Council reflects the increasing integration of their economies with initiatives focusing on strategic technologies, green energy, and resilient supply chains.
Meanwhile, on the other side of the globe, the Italian agricultural export sector, primarily hailing from the Lombardy region, is facing potential ramifications from US trade policies. Coldiretti, the Italian farmers’ association, reports significant concerns over proposed tariffs, stating these could lead to additional costs of up to €250 million for American consumers on Lombardy-produced food and beverages alone.
Coldiretti's analysis indicates the magnitude of this trade threat; should the tariffs apply to all Italian agro-food exports, the consequences could soar to €2 billion. "L'imposizione dei dazi sulle nostre esportazioni agroalimentari è uno scenario che ci preoccupa," remarked Gianfranco Comincioli, President of Coldiretti Lombardia. This expresses deep concern over the outreach and potential fallout from aggravated tariffs, particularly since the US is one of Italy's largest non-EU export markets.
Recent statistics show Lombardy’s agro-food exports to the US reached nearly €27 million for the first three quarters of 2024—a rise of 7.6% from the previous year. The top products include beverages, dairy, processed meats, baked goods, and various oils. Coldiretti has cautioned against the repercussions such tariffs could have, not only impacting Italian businesses but also US consumers' shopping behavior.
The looming threat of retaliation from the EU heightens the stakes. The EU responded previously to US tariffs under former President Trump by implementing its own tariffs on American goods—often those emblematic of US culture, like ketchup, cheddar cheese, peanuts, and more. Observers are left wondering if similar retaliatory measures might again come to fruition, showcasing just how interconnected and fragile international trade relationships can be.
Both von der Leyen and Modi acknowledged the urgency of strengthening their international partnerships amid these developments. During their meeting, significant emphasis was placed on principals for mutual investments and safe technology sharing, propelling both nations toward enhanced cooperation on economic growth, technological innovation, and defense.
Von der Leyen commented on the pressing need for economic growth under the current geopolitical climate, indicating how international collaborations could reshape future global standards, particularly through new technologies such as artificial intelligence. "Posso essere convinta che Europa e India possono plasmare il futuro," she stated, reflecting her belief in the capacity of their partnership.
Beyond commerce and technology, defense cooperation was highlighted as another pillar for this partnership. The EU perceives India as integral to ensuring global security and stability. Addressing this, von der Leyen advocated for enriched collaboration across land, sea, and space as well as cybersecurity initiatives, reflecting broader concerns over regional security and potential discord stemming from US-China tension.
Highlighting economic collaboration, the two leaders discussed the ambitious plans for the India-Middle East-Europe Economic Corridor (IMEC), which aims to create direct connectivity among allied regions, combining rail links with energy routes to fast-track trade. Initiated following the memorandum of intent hashed out during the G20 meeting, von der Leyen called it "a wonderful project," emphasizing its capability to revolutionize connectivity and commerce.
Encouragingly, both leaders echoed a commitment to concrete measures to operationalize these ambitious agreements, aiming to manifest trading pathways and mutual benefits as the world navigates unpredictable reactions from US policies.
With Europe and India deepening their cooperative ventures, this alliance may represent not just resistance to US trade strategies but also the evolution of international trading norms, fostering relationships beyond traditional partners as countries seek to safeguard their interests amid rising tensions.
Moving forward, the focus will remain on establishing frameworks for these collaborations, rooted deeply within the diplomatic dialogue and legislative frameworks necessary to thrive against the backdrop of shifting global trade dynamics.