German Chancellor Friedrich Merz’s visit to India underscores how trade policy has become a central instrument of European strategy. His call to conclude the EU–India free trade agreement without further delay reflects a growing sense in Berlin and Brussels that time itself has become a strategic variable.
Germany, India’s largest trading partner within the EU, exchanges roughly €50 billion in goods and services with the country each year. From a German perspective, a completed agreement would lock in market access and supply-chain security at a moment when global trade is becoming more fragmented and politically charged.
The timing is deliberate. On 27 January, European Commission President Ursula von der Leyen and European Council President António Costa are expected to visit India, signaling that negotiations have entered a decisive phase. Even without a formal signing, the visit suggests that the EU is willing to elevate the deal to the highest political level in order to overcome remaining obstacles.
For the EU, India offers more than market size. Its demographic scale supports long-term demand for European exports, while its reserves of critical raw materials and its growing role in semiconductor manufacturing make it strategically relevant for Europe’s industrial policy. In this sense, India is increasingly viewed as a partial counterweight to China rather than simply a trading partner.
This push fits into a broader pattern. The recent approval of the Mercosur trade agreement—after 25 years of negotiations—illustrates the EU’s renewed effort to build a diversified trade network. The political resistance to that deal within Europe also highlights a key tension: while strategic autonomy is widely endorsed in principle, its economic consequences remain contested at home.
India’s ongoing energy and defence ties with Russia have not derailed the talks. From the EU’s perspective, alignment is now measured less by geopolitical purity than by adherence to predictable, rules-based cooperation. Compared with the increasingly transactional approach that characterises US trade policy, India is seen as a more stable long-term partner.
Security considerations further reinforce the relationship. Discussions over a potential German contract to build six submarines for India—worth an estimated $8 billion—point to a convergence of economic and strategic interests. Such a deal would strengthen India’s position in the Indo-Pacific and signal a gradual shift away from reliance on Russian military suppliers.
At the same time, internal EU challenges remain. The Mercosur agreement continues to face farmer protests and possible legal scrutiny, which could delay ratification. This underlines a structural dilemma for the EU: its external economic strategy is advancing faster than domestic political consensus.
Taken together, the EU’s engagement with India reflects a broader recalibration. Trade agreements are no longer primarily about tariffs and market access, but about resilience, supply chains, and geopolitical positioning. Whether this strategy can be sustained—politically and economically—will depend not only on partners like India, but also on Europe’s ability to manage internal opposition and external pressure, particularly from the United States.