The upcoming mega trade agreement between the European Union and India is being presented as a historic economic convergence between two large democratic systems. The EU’s decision not to impose tariffs on Indian exports, which was allegedly influenced by the scale and strategic significance of the deal, as publicly hinted by Scott Bessent, underscores that this agreement is not solely about commerce. It also pertains to geopolitics, alignment, and long-term positioning in a fragmented global order.
Nevertheless, the main concern from India’s strategic security perspective is not solely tariff relief but rather political reliability and economic resilience. The European Union is not a nation-state; rather, it is a politically divided bloc that often allows its internal disputes to influence its trade policy. This structural reality necessitates a realistic evaluation of the deal’s capabilities and limitations, as it generates an inevitability of uncertainty for India.
The initial important question is whether a trade agreement of this nature can genuinely guarantee uninterrupted access to EU markets for Indian exports without the interference of local European politics. The European Commission negotiates EU trade agreements centrally, and they are legally binding across all member states. In principle, this should offer Indian exporters predictability and stability in a vast consumer market. Nevertheless, the EU’s internal political dynamics frequently erode this coherence in practice.
EU member states often use domestic political concerns, such as environmental protection, labor standards, public health, or climate commitments, to obstruct or postpone imports that they deem politically unfavorable. T These actions rarely violate trade agreements outright. Rather, they manifest as regulatory over-compliance, administrative delays, national court interventions, or abrupt reinterpretations of standards. Agriculture, pharmaceuticals, chemicals, steel, and IT services are particularly susceptible to these strategies. This implies that market access may be operationally obstructed but legally open in India.
However, this implies that no trade agreement between India and the European Union can entirely protect Indian exports from European domestic politics from a strategic perspective. The EU’s fragmented governance structure enables individual states—such as France in the context of agriculture, Germany in the context of industrial standards, and Nordic countries in the context of environmental norms—to exert disproportionate influence. Trade commitments often turn subordinate to internal electoral pressures during periods of political duress. Consequently, India must regard EU market access as politically contingent, rather than perpetually guaranteed.
This results in a more profound strategic imbalance. The EU has a distinctive advantage in that enforcement is decentralized, despite the fact that trade policy is centralized. Without formally violating the agreement, member states have the ability to impede, reinterpret, or complicate the implementation process. Conversely, India negotiates and enforces trade policy as a single sovereign entity. This imbalance is significant during times of crisis, whether they are associated with climate disputes, human-rights narratives, or geopolitical realignments, as it provides the EU with the ability to selectively pressure Indian sectors while maintaining a façade of legal compliance.
The second main concern is whether Indian states can safeguard their domestic industries from EU imports in a manner that is comparable to the way EU member states secure theirs. States are prohibited from imposing direct import barriers in India, as commerce and tariffs are constitutionally under the jurisdiction of the Union government. This is often pointed out as a drawback. Nevertheless, the truth is more complex.
Indian states have substantial indirect defensive capabilities. States have the ability to increase the cost and complexity of market entry for foreign firms by implementing environmental certifications, land-use permissions, licensing requirements, taxation structures, public procurement preferences, and compliance enforcement. Although it is imperative to exercise caution when employing these mechanisms to ensure compliance with the World Trade Organization, they operate similarly to the administrative friction implemented by EU member states. In reality, Indian states have the ability to impede or restrict EU imports without explicitly violating trade obligations, particularly when domestic employment or environmental concerns are legitimate.
However, this method necessitates collaboration with the central authority. India is unable to tolerate open internal fragmentation on trade matters, in contrast to the EU. India’s strength is derived from disciplined federal alignment, rather than veto politics, from a security perspective. In order to prevent retaliation or escalation through dispute-settlement mechanisms, any state-level defensive action must be legally robust and strategically calibrated.
This is the reason why safeguard clauses are the most critical component of the India-EU agreement from a strategic security perspective. Instruments of economic stability, safeguards are not protectionist relics. India must guarantee that the agreement contains explicit, automatic mechanisms to address import surges, sectoral distress, or price undercutting, particularly in sectors that are heavily reliant on micro, small, and medium-sized enterprises (MSMEs), including agricultural processing, textiles, light manufacturing, and pharmaceuticals. The agreement is at risk of generating structural vulnerabilities that could result in domestic social and political instability in the absence of such safeguards.
India must assess the agreement from the perspective of strategic autonomy, in addition to its imminent trade flows. Policy paralysis should not be the consequence of economic openness. India must maintain the autonomy to pursue industrial policy, production-linked incentives, digital sovereignty measures, and public procurement preferences. The national resilience of India would be weakened, rather than strengthened, by a trade agreement that restricts its capacity to respond to disruptions, whether they are geopolitical, financial, or technological.
In summary, the India-EU mega trade agreement should be perceived as a strategic instrument rather than a strategic guarantee. It has the potential to enhance India’s global position, diversify markets, and expand opportunities; however, it is unable to mitigate the internal political instability of the EU. India should not presume that the political benevolence that will be evident tomorrow will be equivalent to the tariff restraint that is in effect today.
India must negotiate with realism from a national security perspective. The EU’s present optimism may be indicative of more extensive geopolitical calculations; however, Europe remains politically reactive and internally divided. India should prioritize the preservation of federal balance, the enhancement of economic resilience, and the safeguarding of long-term strategic autonomy through the agreement.
In commerce, as in security, capabilities are more significant than assurances. The success of the India-EU agreement will be contingent upon India’s ability to effectively defend its economic interests in a politically fragmented and unpredictable Europe, rather than its apparent ambition.