India and the European Union (EU) are set to enhance their ties in defence and security, with a series of key proposals lined up for this year. These plans highlight the shared commitment to strengthening partnerships, particularly in the wake of increasing global security concerns and economic cooperation.

Defence and Security Cooperation

One of the focal points of the renewed India-EU dialogue is deepening their collaboration in defence and security. Both sides are looking to elevate their strategic partnership, particularly at the defence secretary level. Ursula von der Leyen, the President of the European Commission, is set to visit New Delhi this week, marking her first visit to India in her current role. Von der Leyen emphasized, “This is my first trip of the new Commission, and together with Prime Minister Modi, and we want to upgrade the strategic partnership with the largest country and democracy in the world.”

Maritime cooperation, in particular, is a key area of focus, with the EU keen on deploying a liaison officer at the Indian Navy’s Information Fusion Centre in Gurugram. The Centre plays a crucial role in enhancing maritime security across the Indian Ocean, extending from the Strait of Malacca to the Gulf of Aden, and fosters regional cooperation to safeguard these vital waters.

Terrorism and Homeland Security

Beyond traditional defence areas, the two sides are also looking at ways to cooperate in counter-terrorism. In particular, the EU has organized a workshop to explore the use of commercial drones in terrorism, aiming to prevent new threats in the rapidly evolving security landscape. Furthermore, discussions on improving counter-terrorism efforts are expected to take center stage during their talks later this week. The importance of homeland security dialogues between India and the EU has never been more pressing.

Ukraine Conflict and Sanctions

The ongoing war in Ukraine remains a critical issue in the broader context of the India-EU relationship. Ursula von der Leyen has indicated that discussions on sanctions against Russia will be a priority during her visit. “We are looking for India’s help in enforcing sanctions against Russia,” an EU official remarked on Tuesday (Feb 25, 2025).  While India has maintained a neutral stance on the conflict, advocating for dialogue and diplomacy, it is expected to play a key role in efforts toward stabilizing the region and promoting peace.

The Free Trade Agreement (FTA) Discussions

At the heart of India-EU negotiations lies the long-anticipated Free Trade Agreement (FTA). After several rounds of discussions, the two sides are inching closer to an agreement. Key issues such as tariff reductions and market access have been contentious points. The EU is pushing for lower tariffs on key goods such as whiskey, wine, and automobiles, which remain highly protected in India. As one EU official pointed out, “India’s market is relatively closed, especially on key products of commercial interest to the European Union.”

Tariffs are a critical sticking point, with the EU seeking a significant reduction in tariffs on these goods. The EU’s demands come as part of broader efforts to secure a trade agreement that removes barriers to its commercial interests in the Indian market. “We want a commercially meaningful FTA that covers tariffs, non-tariff barriers, and procurement commitments,” the EU official explained. As reported previously by FinancialExpress.com, these discussions are expected to intensify in the coming months, with the tenth round of negotiations scheduled for March 2025 in Brussels.

For India, these tariff reductions are a double-edged sword. While it could open up Indian markets to EU goods, it would also require balancing the concerns of domestic industries.

India has expressed its desire to ensure that the FTA supports its Micro, Small, and Medium Enterprises (MSMEs) and does not disadvantage key sectors, such as steel and aluminum, which are at risk of facing higher duties due to the EU’s Carbon Border Adjustment Mechanism (CBAM).

Connectivity and more

Connectivity continues to be a pillar of India-EU relations, with the India-Middle East-Europe corridor high on the agenda. Launched during the Delhi G20 summit last year, this mega connectivity project is seen as a crucial link between two of the world’s largest markets. Both sides are also exploring the potential of undersea cable connections to further enhance digital ties.

On the technology front, both India and the EU are exploring areas such as green hydrogen, electric vehicle (EV) batteries, and space technology. A proposed MoU on semiconductors and water management is also expected to drive innovation and technology transfer. The prospect of linking India’s Unified Payments Interface (UPI) with a European digital wallet further highlights the growing technological collaboration between the two sides.

High Stakes in Trade Negotiations

The trade agenda is expected to be a key highlight during von der Leyen’s visit. After nine rounds of negotiations, the EU and India are set to hold their tenth round of talks on the FTA in Brussels in March. Both sides have ambitious expectations, with the EU seeking a “balanced, ambitious, and comprehensive” deal. However, the EU’s call for higher standards in areas such as tariffs and procurement contrasts with India’s push for more concessions for its industries.

“We have high expectations from the deal, and the challenge is finding a middle ground where both parties’ interests are reflected,” said the EU official. India, for its part, is aiming to address long-standing market access issues and create new avenues for services exports.