India and EU sign major trade deal to counter US tariff policies

India and the European Union have reached a landmark trade agreement, signaling a major shift in global commerce following months of escalating trade tensions with the United States.

The deal, described as one of the largest in history, comes on the heels of tariffs imposed by President Donald Trump’s administration on both New Delhi and the EU.

While specific terms are still being finalized, the agreement highlights the growing impact of Washington’s unpredictable trade policies on international relations.

Experts from New Delhi and Paris are moving to analyze the strategic drivers behind the pact. Analysts slated to examine the deal include Brahma Chellaney of the Center for Policy Research and Remi Bourgeot of the French Institute for International and Strategic Affairs.

The nascent trade alignment between India and the European Union marks a definitive geopolitical pivot, positioning the two powers as a strategic counterweight to rising U.S. protectionism. As Washington increasingly leverages tariffs as a tool of economic statecraft, other major economies are being forced to diversify their partnerships to hedge against U.S. market volatility. Beyond mere trade flows, this convergence signals a push for a multipolar economic order where non-U.S. blocs take the lead in establishing global standards and rules.

For Vietnam, which currently enjoys preferential access to the bloc via the EU-Vietnam Free Trade Agreement (EVFTA), the deal introduces a formidable layer of competition. Indian exports—particularly in textiles, agriculture, and pharmaceuticals—are poised to gain more favorable terms, directly challenging Vietnam’s core export sectors. This shifts the onus onto Hanoi and domestic firms to rapidly ascend the value chain and sharpen their competitive edge. Ultimately, the move underscores a broader global trend: nations are proactively architecting independent supply chains designed to withstand sudden policy shifts from Washington.