India-EU trade deal: Europe’s bet to hedge a Trumpian world order

Europe’s engagement with India is shifting from polite ambivalence to urgent strategic partnership. At Davos 2026, EU President Ursula von der Leyen emphasised finalising a long-stalled EU-India free trade agreement, potentially covering nearly two billion people and a quarter of global GDP. Beyond trade, the deal represents Europe’s response to a volatile global order, US transactionalism, and China’s rising influence. India offers a democratic, high-growth alternative for trade, investment, and supply chain diversification. The partnership now extends into security and defence, signalling Europe’s recognition that power politics matter and its readiness to hedge risks in an uncertain world.