The European Union’s new free trade agreement with India, announced Tuesday, is the latest step in a wider push by the 27-nation bloc to broaden trade links and reduce what EU leaders describe as overreliance on traditional partners. The agreement, the product of nearly two decades of negotiations, was signed by European Commission President Ursula von der Leyen after she attended a military parade in New Delhi, and it aims to deepen both economic and strategic ties with India.
Speaking as Cyprus began its six-month term at the helm of the EU, President Nikos Christodoulides said the “international order we relied upon for decades is no longer a given,” and he called for “action, decisive, credible and united action.” Christodoulides said the moment calls for a union that is “more autonomous and open to the world,” a theme that has echoed across the bloc as trade and security decisions shift.
The timing of the EU-India agreement comes as the Trump administration’s approach to trade and security has introduced friction and unpredictability, according to the AP report. The article noted that Trump threatened tariffs over opposition to American control of Greenland, then backed off days later, and the episode is described as part of a broader disruption of the trans-Atlantic partnership and U.S. posture.
European officials said the pact could affect as many as 2 billion people. The agreement also would cut tariffs on nearly 97% of EU exports to India, including cars and wine, and on 99% of India’s goods shipments to the EU, including textiles and medicines. The AP report also cited von der Leyen’s description of the agreement as the “mother of all deals.”
The EU’s trade moves have not been limited to India. The AP report said the bloc struck its first trade deal with Indonesia in July, and two weeks before the India announcement, von der Leyen signed a deal with the Mercosur nations that was described as decades in the making to create a free trade market of more than 700 million people. The report also said the EU has upgraded ties with Japan, South Korea and Australia, and that Canada has been urging similar steps, with European political leaders framing the push as part of diversification.
In parallel, European leaders have tied trade and industry planning to defense and industrial capacity. The AP report said Russia’s invasion of Ukraine drove the EU to create financial tools to boost its defense industry and infrastructure, while criticism from the Trump administration about European defense spending pushed those efforts further. It added that EU leaders agreed on increasing defense budgets shortly after Trump began his second term, with 150 billion euros ($162 billion) in loans designated for areas including air and missile defense, artillery systems, ammunition, drones, air transport, and cyber systems, artificial intelligence and electronic warfare.
The report also described how EU defense policy aims to reduce reliance on the United States while dealing with fragmentation across national defense industries. It cited industry leaders and experts who said Europe would need to overcome a decades-long dependence on the U.S. and coordinate more effectively across countries, and it pointed to rising stocks among major European arms makers including Leonardo, Rheinmetall, Thales and Saab.
Energy supply concerns are another driver of the bloc’s diversification push. The AP report said that while the EU has tried to cut energy ties with Russia, it has increased purchases of U.S. energy, citing the Institute for Energy Economic and Financial Analysis. It reported that EU imports account for 14.5% of its oil and 60% of its liquefied natural gas from the United States, citing Eurostat, and it quoted Dan Jørgensen, the European commissioner for energy and housing, saying, “We do not want to replace one dependency for another — we need to diversify.”
Jørgensen said the EU should seek further energy independence by investing in production and alternate suppliers. The report also said the bloc is looking to sources in the eastern Mediterranean and the Gulf, where negotiations are underway for a free trade deal with the United Arab Emirates, and it cited Garima Mohan, a senior fellow at the German Marshall Fund, saying that “Decoupling is easier said than done” but that new global relationships can help the EU deal with Beijing, Moscow and Washington.