India needs to watch out for a remodelled EU that’s taking shape
Subscribe to enjoy similar stories. India should be wary of a remodelled European Union (EU) coming down the turnpike. The 27-member bloc, in addition to its internal contradictions, is fraying at the edges with multiple members expressing displeasure openly.
June elections to European Parliament saw far-right parties making major gains and cornering a majority. The impact of this on existing policy frameworks is still unclear, though some consensus decisions—such as tighter migration rules—seem imminent. The EU’s slowing economy, with the bloc’s GDP growing 0.8% during 2023, could see the community reasserting some of its historic characteristic traits to regain revenue and growth.
All this could spell turbulent India-EU trade ties. The right-wing resurgence, coupled with the centre-right European People’s Party gaining the most seats, is likely to see a hardening of the EU’s protectionist trade measures, and a renewed attempt to unilaterally exercise extra-territorial jurisdiction over Indian capital market institutions. India’s trade with the EU (imports plus exports) contracted by almost 5% between March 2023 and March 2024.
The EU’s protectionist measures are marked by non-tariff barriers. Indian commerce minister Piyush Goyal recently expressed disappointment over the slow progress of India-EU free trade agreement talks. Nine rounds have been concluded so far with no sign of progress.
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