The European Union and India signed a comprehensive free trade agreement on Monday, creating a $27 trillion economic bloc spanning 2 billion people - approximately 25% of global GDP - in what analysts are calling a strategic pivot away from an increasingly unpredictable United States.
After nearly two decades of negotiations, Narendra Modi and European Commission President Ursula von der Leyen finalized India's largest trade deal ever, according to Al Jazeera. "This agreement will bring major opportunities for the people of India and Europe," Modi said at the signing ceremony in Brussels.
Brussels decides more than you think - and this single signature just reshaped global trade architecture.
The pact eliminates or reduces tariffs on 96.6% of EU goods exports to India. In the most significant concession, India will slash automobile tariffs from a prohibitive 110% to 30-35%, eventually phasing down to 10% over several years. For European automakers still reeling from Chinese competition, this opens a market of 1.4 billion consumers.
The services component grants EU firms access to 144 Indian subsectors, while Indian companies gain entry to 102 EU service markets. Even politically sensitive agricultural products saw breakthroughs: wine tariffs drop from 150% to 20-30%, while spirits fall to 40%.
The timing is not coincidental. Both parties face escalating trade tensions with the Trump administration. India currently confronts 50% US tariffs, partially imposed for purchasing Russian oil. The EU faces potential American tariffs over Greenland territorial disputes that have consumed Washington's attention this month.
"This allows both parties to diversify and look beyond the US and grow beyond their dependence on the American market," one trade analyst told Al Jazeera.
US Treasury Secretary Scott Bessent immediately criticized the agreement, suggesting it undermines Western sanctions against Russia - a charge that reveals Washington's growing isolation as traditional allies seek alternative partnerships.
For Brussels, the deal represents vindication of Commissioner Valdis Dombrovskis' strategy of "open strategic autonomy" - the EU-speak for hedging against American unreliability while maintaining enough trade links to avoid Chinese domination. Whether Germany's struggling auto sector can actually compete in India's price-sensitive market remains the multi-billion euro question.
But the geopolitical message is clear: when America turns inward, Brussels turns eastward. Your iPhone may say "Designed in California," but an increasing share of global trade rules will be negotiated between Brussels and New Delhi.
