Explain India’s relations with the European Union in the context of Brexit. (2021, 15 Marks)
India and the European Union have been strategic partners since 2004, two democracies that favour a multipolar, rules-based order. Brexit (referendum 2016, exit on 31 January 2020) mattered to India in two ways. It removed India’s traditional entry point into Europe, and it forced India to deal with Europe on two tracks: Brussels for trade and standards, London and other capitals for strategy.
Britain as India’s gateway, and its loss
- For decades Indian firms used Britain as an English-speaking, common-law base from which to reach the single market. Tata’s Jaguar Land Rover and Tata Steel, and Indian IT companies, built European operations from there.
- The Trade and Cooperation Agreement (2020) kept UK–EU goods trade tariff-free and quota-free but barely covered services and gave no mutual recognition of qualifications. Indian firms now face two regulatory regimes.
- India also lost its most sympathetic voice inside the Union on services and mobility.
Opportunities Brexit created
- With free movement between Britain and the EU ended, Indian professionals compete on more equal terms in both labour markets, and India’s strengths in IT, engineering and financial services can be sold to each side separately.
- A Britain with its own trade policy could negotiate with India, which it could not do while trade competence sat in Brussels. The India–UK Comprehensive Economic and Trade Agreement, signed on 24 July 2025, entered into force on 15 July 2026 together with a Double Contribution Convention that spares temporary Indian workers paying UK social security twice: a Mode 4 gain the EU never offered.
Brexit as a spur to the EU track
Brexit did not overshadow the EU relationship. It pushed it forward:
- The 2020 Roadmap to 2025 and the Porto leaders’ meeting (May 2021) relaunched free trade talks stalled since 2013.
- A Trade and Technology Council (agreed 2022) followed; the EU has one with only one other partner, the United States.
- The India–EU FTA was concluded on 27 January 2026, alongside a Security and Defence Partnership and a mobility agreement. In September 2026 the Commission sent it to the Council for signature. Goods trade exceeded €118 billion in 2025.
Persistent frictions
- The Carbon Border Adjustment Mechanism (definitive phase from January 2026) and the Deforestation Regulation hit Indian steel, aluminium and smallholders. India sees them as breaching common but differentiated responsibilities.
- EU sanctions on refiners of Russian crude, and European Parliament resolutions on Indian domestic affairs, still cause friction.
A theoretical reading
S. Jaishankar’s The India Way (2020) prescribes a strategy to “cultivate Europe” as an indispensable pole of a multipolar world, and Brexit made variable geometry the working method. Liberals see Brexit raising the value of rule-based partners. Realists note that convergence came mostly from shared hedging against China and US tariffs.
Conclusion
Brexit first looked like a loss for India, since it removed the British gateway. In practice it produced two agreements instead of one: with London in force in 2026 and with Brussels heading for signature. The task now is to turn a partnership driven by external pressure into a structural one, since carbon, data and Russia remain unsettled.