The post-US world is already taking shape – look at the massive EU-India trade deal | Ravinder Kaur

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The year was 2007. Steve Jobs had announced the launch of the first iPhone, the sub-prime mortgage crisis was bubbling up in the US, the EU had enlarged to include Romania and Bulgaria, and India had for the first time become a trillion-dollar economy. This was when trade talks between Delhi and Brussels were initiated for the first time. But it wouldn’t be until this very week, almost 20 years later, that a deal was signed after a few final months of unusually accelerated negotiations.

On Tuesday, the president of the European Commission Ursula von der Leyen, president of the European Council António Costa and India’s prime minister, Narendra Modi, announced the “mother of all deals”, which promises to bring together about 2 billion consumers and a quarter of the world’s GDP. The agreement opens parts of India’s famously protectionist domestic market with a focus on exporting manufacturing and services; in return, middle-class Indian consumers will find it cheaper to buy European cars and wine. The overarching EU-India comprehensive strategic agenda is really much larger in scope, taking in defence and security, commitments to multilateralism, mobility and cooperation in a range of areas.

Why the sudden change of pace, after 20 years of stops and starts? The answer has everything to do with Donald Trump. The EU-India free trade agreement unveils the emerging silhouette of a post-US world order amid relentless threats to territorial sovereignty, punitive tariffs and the weakening of multilateral institutions.

The original talks had proceeded slowly over differences on cars, alcohol, agriculture and dairy – and were abandoned in 2013. They were resumed in 2022 as the post-pandemic world sought to “de-risk” and diversify supply chains beyond China. Ironically what brought the deal to the finish line was not China but the looming shadow of Trump. In December 2024, even before the inauguration of his second presidency, the US president had spooked Europe by reviving the idea of owning Greenland. That a close ally was threatening territorial sovereignty prompted a widely shared sense of Europe being “home alone” amid frictions in the tightly woven transatlantic relations.

To add to the chaos, on his first day in office Trump imposed punishing tariffs on America’s neighbours, Canada and Mexico – a move that culminated in the “liberation day” taxes levied on 90 countries across the world. India was hit with one of the highest tariff rates of 50%, which included an additional 25% because of its purchase of discounted Russian oil. And most recently the tariff weapon was wielded once again against the EU and the UK when eight countries sent a few Nato soldiers to Greenland. As a result, the US is not just seen – as recent public opinion surveys show – as undependable in Europe, but as an outright threat.

Now “de-risking” and “decoupling” are back in vogue in Europe – except that the target is Trump’s America, rather than China. And what is at stake is not just supply chains but also the strategic capacity to act against coercion. The recent move by the French government to ban officials from using US video-conferencing software like Zoom and instead promote its home-grown Visio platform is a case in point.

The wide scope of the evolving India-EU partnership suggests a move towards greater convergence in terms of the commitment to multilateral institutions, and cooperation in a range of areas of security and defence, research, mobility and connectivity, including enhanced engagement in the Indo-Pacific region. As the US withdraws to the western hemisphere (through the so-called Donroe doctrine), the Indo-Pacific region, which was once central to US engagement in Asia, is now more open to collaboration with the EU.

The trade deal is the largest of its kind but is also part of a growing trend as many nations attempt to forge new alliances. Brussels recently concluded a trade deal with the South American Mercosur trade bloc, with several more in the pipeline; India has made agreements with the UK and New Zealand in the last few months alone. While ratification and implementation take time, and may even hit a roadblock or two (like the delay in the EU-Mercosur deal), it suggests a shift that is unmistakable. The world many outside the west have long dreamed about – of multipolarity, strategic autonomy, even de-dollarisation – is taking shape, first slowly and now rapidly.

A day before the EU-India summit, EU leaders were for the first time guests of honour at India’s Republic Day celebrations, invited to witness the military parade and colourful pageantry. The emerging pictures were a world removed from the gloom that has overtaken the European mood in recent months. They projected bonhomie, even optimism.

The world is moving on. America first increasingly seems to be America alone.