Trump’s customs policy is bringing Brussels and Delhi closer together. This makes strategic sense, but the Modi government is not the more moral partner.
D EU Commission Chairwoman Ursula von der Leyen calls the free trade agreement with India, in which the breakthrough was announced on Tuesday, the “mother of all deals”. It is the largest trade agreement ever agreed by both sides. It will still take at least a year for it to come into force. But the fact that the negotiations, which began in 2007, have recently made a successful final spurt is due to the Donald Trump’s customs policy and China’s power politics. They are midwifes of the deal, themselves a child of geostrategy and the effort to diversify global trading partners.
Trump maintained a close relationship with Indian Prime Minister Narendra Modi, Until in August he suddenly imposed a 25 percent punitive tariff on India for buying Putin’s oil. At the beginning of the year, he suddenly threatened Europeans who spoke out against Trump’s Greenland policy with a special ten percent tariff. And China, for example, imposed a tourism boycott on Japan because it did not like the statements made by the local prime minister about Taiwan. The EU-India deal shows that rules-based negotiations remain a sensible alternative. Excluding agriculture was smart. Anything else would have made reaching an agreement extremely difficult. Peasants on both sides are capable of effective blockades.
It has long been clear that Europe’s trade with India is underdeveloped. According to von der Leyen, Europe’s share of the current bilateral trade volume of 180 billion euros is expected to double by 2032. However, a doubling of trade would still not be 40 percent of today’s EU trade with China and less than 25 percent with the USA.
It is nonsense to talk about a partnership of values between the EU and the “largest democracy in the world”. India is certainly more democratic than, say, China. But there are major steps backwards here under the Hindu nationalist Modi. And India – as the cheap purchase of Putin’s sanctioned oil shows – does not care about democratic values when it comes to trade. Ultimately, so does the EU. So far, refined oil is India’s largest export to Europe. And that mostly comes from Russia. It’s all about financial and strategic interests.
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