From Comfort to Crisis
For decades, Europe has enjoyed a form of stability built largely on convenience rather than careful foresight. After World War II, the European Union (EU) adopted a model of “strategic comfort,” subcontracting core pillars of its security and economic strength to trusted partners. Under this “strategic comfort,” defence was assigned to the United States (U.S.) through NATO, while dependence on energy rested on Russia’s vast reserves. Significantly, manufacturing—the backbone of economic competitiveness—migrated to China, where scale and cost advantages seemed irresistible.
For over 70 years, this strategy worked magnificently: EU economies flourished, citizens enjoyed high living standards, and political stability remained largely constant. Yet the world has changed. The last half-decade has revealed that Europe’s dependence on other nations was a fragile foundation for strategic autonomy.
Ultimately, the Ukraine war exposed the weaponisation of energy, as Russia manipulated its gas supplies to influence European policy. The COVID-19 pandemic became an example of how supply chains could be disrupted overnight in the EU, leaving manufacturers scrambling for essentials. Even the long-trusted NATO alliance exhibited cracks when political pressures from Washington highlighted the conditional nature of military solidarity. Because of these structural shifts in Europe, the comfort zone suddenly seemed fragile, if not illusory.
Currently, the EU faces a stark realisation: strategic independence is not optional, and the cost of complacency is too high. Europe does not need ideology or fustian; it needs substantial stability that can withstand crises, disruptions, and geopolitical distress.
India: Stability Without Strings
India, with its strong democratic foundations, growing economy, and expanding manufacturing capabilities, is an outstanding strategic partner suited to Europe’s recalibration. Unlike China, Russia, or the U.S., India does not pose strong-arm geopolitical risks, because its partnerships are not tied to conditional military or political obligations.
Firstly, manufacturing scale without geopolitical vulnerability—Indian factories can produce pharmaceuticals, textiles, automobiles, and aircraft components at scale without the supply-chain risks associated with China.
Secondly, energy partnerships free from coercive leverage—while India is not a global energy superpower, it offers an established conventional market for long-term energy collaboration.
Thirdly, political alignment without overreliance on a single superpower—as a vibrant democracy with growing influence in the Indo-Pacific, India aligns strategically while maintaining independence.
“This is not charity; it is survival economics.”
Europe understands that its future competitiveness depends on reliable partners who can deliver production, supply, and policy alignment. The European Commission recently confirmed that a landmark EU-India Free Trade Agreement (FTA) was signed on 27 January 2026, stating that the agreement represents far more than tariff reductions and serves as a strategic instrument to reinforce Europe’s industrial and geopolitical autonomy.
The EU-India FTA: More Than Trade
Unlike archetypal trade agreements, the EU-India FTA was premeditated to reshape entire sectors and rebalance economic gauges. Before the new FTA, if a European product priced at €80 entered India, duties could push its cost to €100. Under the new FTA, these duties will fall close to zero, keeping the price near €80. Conversely, Indian goods will become more inexpensive in Europe, boosting volumes, revenues, and profits.
The implications for India are transformative across sectors such as textiles, leather, pharmaceuticals, petrochemicals, and automobile components, which could expand rapidly. FTAs invariably create winners and losers; entire industries are repriced and new competitive hierarchies emerge. For India, this deal becomes an opportunity to strengthen its economy, attract investment, and reinforce its position in global value chains.
Winners, Losers, and the Negative List
Yet this opportunity carries complexity. Negative-listed sectors excluded from duty reductions will define the ultimate winners and losers. Some Indian production industries may struggle to compete in Europe if essential criteria remain absent. Conversely, sectors such as apparel, textiles, leather-footwear, jewellery and gems, liquors, food products, seafood, dairy, cereals, and poultry that are fully integrated into the India-EU FTA will gain a decisive advantage, potentially capturing substantial market share and technological investment.
Navigating this balance is critical. Both sides must ensure that sensitive domestic sectors are sufficiently shielded to maintain political support while leveraging the agreement to maximise economic growth and strategic benefit. Execution will determine whether the FTA is transformative or merely symbolic.
A Strategic Lifeline
Beyond economics, the new India-EU FTA signals a broader geopolitical realignment influenced by the impact of Trump-era tariffs. Europe is pivoting eastward—not to China, nor to distant allies, but toward India. This shift reflects a pragmatic calculation of India’s strategic reliability, democratic credentials, and independence. It offers Europe what it lost: scale, stability, and alignment without past dependencies or coercive leverage. Today, FTAs act as more than trading instruments; they become trump cards for strategic autonomy.
For India, this is equally noteworthy. The agreement is not just about exports or market access; it is an affirmation of India’s rise as a dependable global partner and a critical strategic actor in Europe’s long-term economic and geopolitical calculus.
For Europe, signing a deal with India becomes a hedge against crises, a buffer against instability, and a pathway to recover industrial strength. For India, the FTA strengthens domestic sectors and fortifies strategic partnerships. Hence, the “Mother of All Deals” could reshape India’s trade, development, economy, politics, and strategic power across the Indo-Pacific over the coming decades. It is not merely a trade agreement; it is a strategic lifeline and a pathway for Europe’s independence and India’s rise as a global partner.
Dr. G. Chandrasekaran is an Assistant Professor, Centre for Southeast Asian Studies, Nagaland Central University.
