Between Trade and Tensions Rethinking the EU’s India Playbook

The Article questions how much European Union pressure is related to the Indian economic contacts with Russia, and thus poses threats to the general logistics of EU-India interactions that facilitate both trade negotiations and pillars of cooperation.

The emerging strategic and growing Indo-Pacific policy nexus, a rebalancing of the Indo-Pacific strategy of the European Union in its five pillars of policy and center, stands in terms of trade, green transition, connectivity, digital cooperation, and security. This multipronged practice is indicative of the understanding by the EU that India is an important partner in the construction of an order based on rules and the promotion of sustainable development objectives. Nonetheless, the Sino-Russian interactions also present a possible threat to the effectiveness of this strategy, due to the invasion of Ukraine by Russia; India has had long-standing energy relations with Moscow, leading to further depths of geopolitical complexities. Though India mainly relied on the utilitarian concern over its oil imports with Russia, which are highly positioned by the necessity of the day-to-day operations, the member states in the EU are still divided about the relationship between such activities and the broader sanctions regimes and commitments to the norms. This strain raises the important question: might the momentum of EU-India collaboration in various sectors be slowing because of India's overemphasis on its policy toward Russia?

India-EU FTA negotiations restarted in July 2022. India and the European Union on 28 February 2025, set the target to conclude the negotiation for the bilateral Free Trade Agreement by the end of the year.The current article is an analysis of this quandary by assessing the strategic dangers of merging bilateral advancement with third-party political fisticuffs. It participates in taking a lighter, more nuanced approach, which is more interest-based to avoid jeopardizing the integrity of the EU strategy in India, but one that still has room to add in the diplomatic sensitivity. Thus, it emphasizes the significance of issue-specific interaction and respect towards strategic autonomy in maintaining continuity to this joint venture in the long term.

India Strategy withthe EU

The modern European Union's interaction with India is a strategic adjustment that is determined by geopolitical aspects, market necessity, and ideals. Based on the five-pillar framework, the EU-India strategy works on enhancing collaboration in the areas of trade, sustainability, connectivity, digital transformation, and security.

Current Strategic Underpinnings and History
Formalised in 2004, reinstated in 2020, the EU-India Strategic Partnership is based on a long-running history of diplomatic and economic cooperation between both sides. It is based on the same democratic principles, presence of a multilateral form of commitment, and maintenance of a rule of law-based international order. In 2021, a recommendation of the European Parliament noted that there is a need to pursue an overall strategy that would include incorporating foreign policy, development cooperation, and economic diplomacy.

The Cornerstones of Trade and Investment
Trade has been the most prominent one, with the EU being the third-largest partner in trade with India. Trade in goods and services between the two countries reached EURO 95.5 billion in 2020, and India hosts over 6,000 companies based in the EU, creating millions of jobs. The fact that there have been continuous discussions on a Free Trade Agreement (FTA) and an Investment Protection Agreement is an indication that there is a desire to minimize the barriers and increase regulatory convergence. These endeavours are reinforced by the establishment of the EU-India Trade and Technology Council to bring on board a digital and green standard in 2023.

Sustainable Development and Green Transition
Another pillar is climate cooperation, in which the EU has been supporting the objectives of India in renewable energy, as well as the aims of the circular economy. The European Investment Bank has made investments worth more than EURO 3billion in infrastructure and clean energy in India. In the framework of the NDICI-Global Europe, 90 million euros will be provided to India in the form of grant funding from 2021 to 2027 that will strengthen the joint action on climate resilience, biodiversity, and resource efficiency.

Networking and Security Cooperation
The connectivity programs, such as the Global Gateway Strategy, have the potential to improve infrastructure connectivity between Europe and Asia, with India serving as a major hub. Digital cooperation is concerned with the following issues: cybersecurity, data governance, and AI ethics. There is security cooperation in the aspect of counter-terrorism, of maritime security, and of non-proliferation, and in these areas, Indo-Pacific states are concerned with the same issues. These dimensions are anchored on joint decisions and sectoral consultations, which institutionalize confidence and operational synergy.

Russia-India and Energy Relations

Energy cooperation between Russia and India has been characterized by a pronounced deepening of relationships during the last few years due to the joint economic expediency, but also caused by a strategic diversification policy. However, this emergent sense of interdependency also poses a complex task to the emerging India policy of the European Union, where the process of calculation of policy becomes complicated, and a complex reconsideration of the parameters of engagement is required.

The Proliferation of the Russian Oil Imports
Over the years 2023 to 2024, India turned out to be the major recipient of Russian crude oil, apart from China, and it represents 35 percent of the Russian exports. Landmark changes were largely driven by huge discounts offered by Russian suppliers, over 15-20% below internationally recognized referral prices, which enabled big Indian refiners, including Reliance Industries and Nayara Energy, to import more. Therefore, India has managed to scale up its refining capacity and re-export refined products, and in particular diesel and jet fuel to the European markets. The occurrence is an expression of a calculated strategic move by India to be able to source cheaper energy material and at the same time hedge its capacity to refine and competitiveness in exports.

Threat to the Export Channels of India and EU Sanctions
The eighteenth sanctions by the European Union, trying to ban the importation of oil products that have been refined using Russian crude oil, were a major barrier for India. This policy directly threatens the Indian USD 15billion petroleum export portfolio to the EU, of which 27percent shrinkage has already been registered. Although the sanctions are intended to restrict the sources of energy revenue of Russia, they end up punishing the Indian trade as legitimate and thus raising concerns as to the third-party penalty framework of the EU and its strategic consequences.

Geopolitical Image and Strategic Independence
Outside of more economically oriented outcomes, the energy relationships between India and Russia are embedded in the extreme geopolitical implications. Such transactions are also increasingly evaluated in a Western capital lens to understand them as the reflections of a larger sanctions compliance and political suitability. India, on the other hand, believes in the doctrine of strategic autonomy and tries to balance the energy needs against diplomatic neutrality. Any effort to pressure India to limit Russian imports, especially through trade sanctions or conditional talks, is likely to subtract trust and throw off the integrity of broader EU-India collaboration.

EU-India Strategic Agenda
The EU strategy towards India, which is framed according to the following pillars of trade, green transition, and connectivity, could be put at risk as long as issues regarding Russia become the central focus of the possible policy change direction. With the energy trade equated to conformity to politics, the EU runs the risk of halting the free-trade to agree negotiations and the erosion of climate and digital partnership progress. Such a more practical approach that separates bilateral deals and ties with third parties would best maintain the momentum in its strategic initiatives and properly address the sovereign choice of India in its internal policy.

Possible risks of Over-linking

Although the European strategic approach to India is quite strongly thought-through, it has one severe weakness: the inclination to closely associate bilateral cooperation with Indian policy towards Russia. These conflations can tend to overlap the portals of trust as well as significant advancement.

Trade Negotiations
The EU-India Free Trade Agreement (FTA), which has been negotiated since 2007 and reinstated in 2022, is one of the foundations of economic interaction. Nevertheless, basing the progress on the energy ties between India and Russia will bring a threat to undermine the results achieved throughout the years. The Indian trade negotiators have always stressed the issue of autonomy in their foreign policy, and any seeming politicization of trade negotiations may cause delays or disinterest. The internal faults within the EU, such as the member states that uphold the ideas of strategic pragmatism and persuasive ones that uphold the ideas of normative alignment, further complicate agreements over trade terms.

Credit and Delicacy over Truth
The strategic thinking of India has a vision of non-alignment and a multi-vector policy. Using such cooperation as a condition upon third-party war, i.e., with the Ukraine war, can be viewed as an attempt at coercion, or as not sensitive to Indian interests in the region. Such sentiment may undermine trust in areas where there should be a lasting working relationship, like in climate finance, digital governance, and infrastructure. In turn, the EU's credibility is based on its ability to acknowledge the sovereign decisions in India, but recommends common goals.

Sectoral Initiative
In addition to trade, there are other sectors in which over-linking would hamper other areas, like green-connectivity and energy security. India provides a good example, as climate initiatives funded by the EU, such as solar grid modernization and urban mobility, are dependent on sound diplomatic lines. Provided that Russia-related issues re-emerge the agenda, such sectoral initiatives are likely to fall within the bandwidth, or they will face fund redistribution. On the same note, the EU-India TradeandTechnology Council, which was initiated in 2023 to synchronise digital standards, might lose ground once trust falls.

Requirement of Issue-Specific Engagement
The EU should use a balanced strategy to de-link bilateral collaboration with geopolitical conflicts to protect the integrity of its India strategy. Partnering on the issue-related matters such as trade, climate, and digital relations without considering the relations with Russia can be taken so as not to lose the momentum and develop mutual respect. The strategy fits the overall Indo-Pacific vision of the EU, which focuses more on an inclusive and rule-based cooperation, without necessarily conditionality.

Balance between Values and Interests

The steady course of the EU-India strategic partnership in the course of acute geopolitical opposition deserves a delicate treatment in its genuine intent of justifying normative commitment and of meeting operational interests. An integrated plan is required that focuses on win-win outcomes and still gives a role in strategic autonomy.

Resilience, Strategic Autonomy and Sovereign Choices
The foreign policy in India hinges on the concept of strategic autonomy and allows it to cover its interests with various partners without conflicting interests. This is one of the principles that should be recognized by the EU as the basis of a sustainable partnership. The imposition of policy on India's cooperation on its attitude to Russia will jeopardize this freedom and drive away a major Indo-Pacific player. Accepting the Indian sovereign decisions, more specifically, on energy acquisition and relations with the neighbours, can be a source of trust and confidence towards the EU as a non-coercive partner.

Saving Sectoral Modernization
It is crucial that geopolitical tensions surrounding certain cases are dissociated from sectoral cooperation in order to keep the five pillars of the EU allotment and strategy on India intact. An example provided is that in coordination over climate, digital governance, and infrastructure, they should continue without incorporating the issue of Russia. The EU-India Trade and Technology Council is an example of such a modular approach, allowing for the discussion of digital standards and green innovation with specificity to avoid getting caught in the broad currents of foreign policy disagreement. This type of compartmentalisation makes sure that the development in one area is not held hostage to the differences in another.

Using Multilateral Platforms to clarify Normative Alignment
With all the pros, there are some cons related to isobutanol:

Implications to the Engine Longevity and Maintenance
Instead of bilateral pressure, the EU can use multilateral conferences, such as G20, IEA, and UNFCCC, to push India on normative projections, such as compliance with sanctions and high energy ethics. Such sources offer a more level playing field to the debate, socio-political issues are prevented and thereby keeping diplomatic goodwill. Joint working on global climate finance, digital rights, and maritime security could help strengthen common values.

Towards a Trusted, Reliable and Skilled Partnership
An expedient way forward dictates that the EU needs to pursue a more bends-at-will, interest approach that will not compromise developmental objectives that suit India in terms of geopolitics. This involves supporting the energy shift of India, investing in robust infrastructures, and inclusive digital ecosystems. This objective can be achieved by ensuring that, instead of conditionalities, the EU concentrates on deliverables which will enable the EU to consolidate its strategic presence in South Asia and become part of a multipolar world order in a significant way.

Conclusion

The existing level of the EU-India strategic partnership is at a precarious stage that requires careful handling of the dialogue between the normative expectations and pragmatic interests. Despite the fact that the five-pillar system has a solid base of cooperation in the areas of trade, sustainability, connectivity, digital governance, and security, its effectiveness is determined by the ability to isolate bilateral development relating to external geopolitical factors, in particular, the energy relations of India and Russia.Associating strategic engagement with third-party conflicts will cause a loss of trust, a stalemate of negotiations, and a side-tracking of sector efforts. The issue-specific and calibrated approach, considering the strategic independence of India and supporting the common goals, is a vital element to maintain the cooperation.With a renewal of the convergence of interests and use of multilateral forums to engage in normative conversation, the EU can maintain integrity of its India policy and thus play a role in a robust, inclusive Indo-Pacific order.But all in all, the future must be based on having a value-plus-realism approach in which cooperative work must be guided by a long-term vision instead of conditionalities in the short run.

Practice Question
Q. Why is Russia considered India’s most trusted strategic partner? Discuss with reference to historical, defence, and geopolitical dimensions. (250 words)
Introduction
The nature of the Indo-Russia relations is a well-developed strategic relationship, which is being marked by a continued upgrade in trust between these two nations, a connection between their policies, and their geopolitical interests. In this multipolar world today, Russia is still one of the most reliable Indian partners in the field of defence and energy, as well as in the multilateral arena.

Historical Legacy
The bilateral relationships started during the Cold War era, when the Soviet Union supported India through its industrial and military growth and supported its policy in the United Nations.

• This relationship was timorously enforced by the 1971 Treaty of Peace, Friendship and Cooperation, which saw specific matters of collaboration during the Bangladesh Liberation War, and thus a tradition of through support was founded.

Defence Cooperation
It is estimated that more than sixty percent of Indian defence equipment is provided by Russia, such as the S–400 air-defense apparatus, Sukhoi combat planes, and nuclear-powered submarines.

• Industrial projects like the BrahMos missile or licensed manufacture of T-90 tanks are both examples of high levels of technological interdependence.
• This cooperation is formalised and maintained by institutional instruments such as annual strategic summits and the Inter-Governmental Commission on Military-Technical Cooperation.