27 January 2026 – India and the EU agree on a free trade agreement. But is this really the “mother of all deals,” or did the Commission simply need an urgent success story?
EU-India Free Trade Agreement: The Mother of All Deals
– or the Confession of Failure of European Trade Policy?
The European Commission has recently been in urgent need of a success story. After the Mercosur agreement it negotiated met with massive resistance – particularly from Europe’s agricultural sector – and after the European Parliament referred the deal to the European Court of Justice for legal review, Brussels found itself under significant trade-policy pressure.
That gap is now meant to be filled by the announced free trade agreement between the EU and India. Commission President Ursula von der Leyen has already anointed it the “mother of all deals“. From a purely numerical perspective, this superlative is not entirely unfounded: a free trade zone encompassing around two billion people would indeed be historic. But that is precisely where the problem begins.
Good Headlines Instead of an Honest Debate
A look at the Commission’s communication reveals how urgently positive headlines are needed. In the official press release, the term “imports” is virtually absent, while supposed export opportunities for European companies in India are lavishly promoted. It is a familiar pattern: risks are downplayed, opportunities maximised.
Yet it is precisely imports from India that have triggered significant resistance within European industry in recent months. Not without reason, India now ranks second-behind China-among the countries against which the EU has imposed trade defence measures.
Steel: The Blind Spot of EU Free Trade Policy
The contradictions in the EU’s approach become particularly evident in steel. While Brussels regularly portrays China as the main source of market distortions, it tends to overlook the fact that in 2024 more steel was imported into the EU from India than from China-and at significantly lower prices.
Moreover, Indian steel is considered particularly CO2-intensive. According to the EU’s own calculations, direct emissions are around 60% higher than those of Chinese production. Nevertheless, steel is set to be fully exempt from tariffs under the EU-India agreement.
In the short term, the Commission may attempt to enforce planned 50% steel tariffs via the bilateral safeguard clause embedded in the agreement. Structurally, however, the contradiction remains: climate protection rhetoric on the one hand, trade-policy reality on the other.
That India pushed until the very end for exemptions from steel tariffs and from the CO2 border adjustment mechanism (CBAM) fits this picture. Whether these efforts were truly unsuccessful will only become clear in implementation – and any such concessions would provoke an outcry among other trading partners with regard to CBAM.
Economically Sensible – Politically and Morally Bankrupt?
The economic rationale of a free trade agreement with India can be debated. The political and moral costs, however, are hard to ignore.
In recent years, the EU has portrayed itself rhetorically as a global moral authority: human rights, the rule of law, environmental standards, and “values-based trade” were elevated to guiding principles. Little of this remains visible in the India deal.
India’s close ties with authoritarian regimes are largely ignored by the Commission – most notably its relationship with Iran. While Tehran is subject to comprehensive sanctions, India remains one of its key trading partners and continues to supply sensitive technology, including for nuclear reactors.
Only recently, India actively voted against a condemnation of Iran in the UN Human Rights Council over massive violence against its own population – not by abstaining, but by voting no, citing non-interference in internal affairs. This is a position Brussels otherwise regularly condemns. Against the backdrop of reportedly more than 36,000 deaths in Iran, the Commission’s enthusiasm for concluding this deal appears profoundly misplaced.
India’s close military and economic cooperation with Russia is likewise tacitly accepted – while the same Commission places moral and regulatory obstacles in the way of any European business ties with Moscow.
An old saying fits disturbingly well here: “If you sleep with dogs, you should not be surprised to wake up with fleas.” The more relevant question is who has picked up more fleas from this deal. In terms of corruption and blatant double standards, the EU Commission is scarcely inferior to the Indian state leadership.
Parliamentary Oversight as a Nuisance
Compounding this is a growing institutional imbalance. The European Parliament is acting increasingly critically toward the Commission – not only substantively, but also procedurally.
It has recently become known that support for key Commission initiatives is being demanded internally under growing pressure. At the same time, accusations are mounting that the Commission is systematically attempting to sideline Parliament.
A recent written question by several MEPs seeks clarification as to why the Commission – despite assurances to the contrary – plans to provisionally apply the Mercosur free trade agreement, thereby effectively bypassing parliamentary participation rights.
Free trade is undoubtedly a central driver of economic growth, and Europe’s economy urgently needs new momentum and opportunities. Yet it is precisely the European Commission that has, in recent years, demonstrated its inability to explain free trade honestly, cushion it socially, and legitimise it democratically.
The EU-India agreement thus stands as a symbol of a trade policy that no longer reconciles economic interests, moral claims, and democratic procedures-but instead plays them off against one another in order to secure its own political survival.
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