India and the European Union (EU) together represent about 25 percent of the world’s GDP and 33 percent of global trade. Currently, India’s trade with the EU stands at $25 billion, while trade with the United States is $45 billion. Despite this, Washington has expressed concerns over the newly signed trade agreement between India and the EU.
Influential US senators, top administration officials, and policy experts have warned that the India-EU Free Trade Agreement (FTA) could marginalise the United States in global trade and strategic alliances. They fear that New Delhi and Brussels will reshape international trade dynamics through this deal.
Senator Mark Kelly described the agreement as a reflection of growing frustration among America’s allies regarding Washington’s trade policies. The Arizona Democrat posted on social media, “The European Union has signed a trade and security pact with India. Canada and the UK are negotiating with China. This is happening because Donald Trump alienated our allies.”
Kelly warned that such developments could negatively impact the US, as deals forged by its partners with other countries inevitably influence America’s standing and interests.
The India-EU trade agreement was announced this week in New Delhi and has been hailed by leaders on both sides as India’s largest-ever trade deal. Ursula von der Leyen, President of the European Commission, called it the “mother of all deals.”
She highlighted that the pact will create a free trade area covering two billion people, providing mutual benefits amid global trade tensions and geopolitical uncertainties by linking the world’s two largest economies.
Senior officials from the Trump administration also expressed disappointment with Europe’s move. Treasury Secretary Scott Baesent criticised the EU for not aligning with Washington on tariff issues. In an interview with CNBC, Baesent stated, “They should do what’s best for them, but I found the Europeans very disappointing. They were unwilling to join us on high tariffs, yet wanted to proceed with this trade agreement.”
Policy experts in Washington view the deal as a warning sign for US trade strategy. The Information Technology and Innovation Foundation (ITIF) noted how other major economies are advancing while the US lags behind.
Rodrigo Balbotin, Associate Director for Trade, Intellectual Property, and Digital Policy at ITIF, said, “The EU-India FTA should serve as a wake-up call for Washington.” He pointed out that despite tariff reductions and new trade rules adopted by other countries, the US remains sidelined.
Balbotin acknowledged some shortcomings in the agreement, mentioning that several European digital regulations, especially the Digital Markets Act, discriminate against multinational firms. He also noted that India remains one of the most challenging major economies regarding intellectual property protection and enforcement. Nevertheless, he suggested the deal might indirectly benefit the US.
With the Trump administration seeking new trade agreements, Balbotin added, “If this deal helps reduce barriers within its borders, it could ultimately benefit the United States.”
ITIF welcomed the deepening economic ties between India and the EU. Balbotin emphasised that in an increasingly protectionist global trade system, the free trade agreement between two large democracies is a positive development.
He also stressed that the biggest challenge this century remains China’s trade practices. Meanwhile, other trade experts advised caution in assessing the deal’s impact. Former US trade official Mark Linscott termed the agreement a significant diplomatic achievement but warned against exaggeration.
Writing for the Atlantic Council, Linscott said, “There is no doubt that the India-EU FTA deserves attention, but it is unlikely to cause a major shift in global trade or economic growth.”
Linscott explained that benefits would materialise gradually through phased tariff reductions and regulatory certainty. Sensitive issues such as agriculture, intellectual property rights, and the EU’s Carbon Border Adjustment Mechanism have been deferred for future talks.
He pointed out that the deal still requires domestic approval, including consent from EU member states and the European Parliament.
From Washington’s perspective, Linscott stated that the agreement should not harm US trade relations. He wrote, “There is no reason this deal should weaken US trade ties with the EU or India.” In fact, it may accelerate progress toward a US-India trade agreement.
Negotiations between India and the EU on a trade deal began in 2007 but stalled due to disagreements over tariffs, market access, and regulations. Talks resumed in 2021, and while the full impact will take time to unfold, Washington’s reactions indicate that as free trade partners advance, the US may need to reconsider its trade strategy.
My name is Bhupendra Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
Leave a Comment