How India Is Hedging in a Fragmented Global Order

India’s recent diplomatic choreography has been misread as a geopolitical conversion: first a landmark trade agreement with the European Union, and now a headline-grabbing “deal” with the United States that reportedly includes an end to Russian oil purchases. But this narrative of a decisive turn to the West oversimplifies New Delhi’s strategy.

A New Trade Architecture for a Fragmented World

In the space of weeks, India has concluded trade pacts with both the European Union and the United States, striking at the heart of a fracturing global economy. On January 27, 2026, New Delhi and Brussels signed the India–European Union Free Trade Agreement, nearly two decades in negotiation, designed to liberalize goods and services and deepen investment cooperation. The EU will levy zero tariffs on roughly 99.5% of Indian exports over time, potentially unlocking an export boom and nearly doubling bilateral trade toward an estimated $272 billion by 2032.

India’s trade with the EU already stood at US$136.5 billion in 2024–25. This is comparable to its US trade figure and larger than its trade with China. This FTA isn’t merely economic: it positions India at the nexus of US-EU tensions insofar as the latter now has unrestricted access to one of the largest economies in the world. In the wake of US-EU tensions, an agreement with India gives the EU a very timely leeway. This deal also allowed India to position itself as an alternative to China for Europe. Europe wants supply chain alternatives to China; India wants market access and technology flows. The pact thus serves both interests without subjugating to a........

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