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Trade, technology and trust: Why the EU is India’s largest economic partner

India-EU relations are undergoing a decisive transformation – from structured dialogue to tangible, outcome-oriented cooperation. With preparations underway for the upcoming India-EU Summit in New Delhi, both sides are pushing to finalise a long-pending Free Trade Agreement and adopt a new Joint Strategic Agenda, signalling renewed political will at the highest level.

The historic February 2025 visit of the EU College of Commissioners to India – the first such outreach to any partner outside Europe – marked a turning point. It underscored the EU’s growing recognition of India as a central strategic partner amid global economic uncertainty, supply chain reorientation, and geopolitical shifts.

Guided by the India-EU Strategic Partnership: A Roadmap to 2025, the relationship now spans trade, defence, clean energy, digital technologies, space, connectivity, and mobility. New institutional mechanisms such as the Trade and Technology Council (TTC) reflect a move beyond intent towards implementation, making India-EU cooperation one of the most comprehensive partnerships India holds with any regional bloc.

With bilateral goods trade touching nearly $136 billion in 2024–25, the European Union has emerged as India’s largest trading partner for goods. Beyond merchandise trade, services exchanges have grown steadily, with Indian service exports to the EU nearly doubling over five years.

Negotiations on the India-EU Free Trade Agreement – resumed in 2021 – have gained renewed momentum as both sides seek resilient supply chains, diversified markets, and regulatory convergence. European companies continue to invest heavily in India’s manufacturing, green energy, and digital sectors, while Indian firms are expanding their footprint across Europe.

The Trade and Technology Council, launched in 2022, has become a critical platform for cooperation on trusted technologies, semiconductors, artificial intelligence, and green transitions. Together, trade and technology now form the backbone of an economic partnership built not just on volume, but on shared standards and long-term trust.

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