Editorial 2: A Eurocentric reset, a gateway for India
Context
The U.K.-EU reset could reshape India’s trade, diplomatic ties, and soft power influence in the West.
Introduction
In a diplomatic move with wide-reaching impact, UK Prime Minister Keir Starmer’s new agreement with the European Union (EU) marks a strong “reset” in their relations, restarting cooperation on food standards, fishing rights, defence, and border checks. Though this may seem Eurocentric, it creates new opportunities and challengesfor India that require immediate focus.
- The U.K. and the EU are among India’s key trade and diplomatic partners, and their renewed alignment could reshape India’s global strategy.
- For Indian exporters, it may simplify compliance and restore supply chain flow.
- For policymakers, it offers a chance to strengthen strategic alliances. For the diaspora, it could transform education and migration opportunities.
- In short, the U.K.-EU reset is more than a regional shift —
- it is a moment that could redefine India’s trade routes, diplomatic ties, and soft power influence in the West.
Renewed Collaboration Impact on Indian Exports
- Key Areas of Cooperation:
- Food safety
- Customs coordination
- Fisheries
- Trade Statistics FY2024:
- Exports to EU: $86 billion
- Exports to U.K.: $12 billion
- Both regions are strategically important for India’s external trade.
Challenges and Opportunities Post-Brexit
- Indian exporters face two separate regulatory regimes in the U.K. and EU.
- Important sectors affected: pharmaceuticals, textiles, seafood, agro-based products.
- A harmonised U.K.-EU regulatory framework can:
- Simplify compliance
- Reduce redundant processes
- Lower operational costs
Sector-Specific Benefits and Concerns
- Pharmaceuticals:
- India supplies over 25% of the U.K.’s generic medicine needs.
- A unified approval process would speed up clearances and cut costs.
- Seafood:
- Indian exports valued at ₹60,523.89 crore (~$7.38 billion) in FY2024.
- Aligned food and fishing standards could reduce trade barriers.
- Small and Medium Enterprises (SMEs):
- Might struggle with stricter common standards due to limited capital and technical expertise.
- To stay competitive, India must enhance its export ecosystem.
- Strategic Measures for Competitiveness
- Remission of Duties and Taxes on Exported Products (RoDTEP)
- Production-Linked Incentive (PLI) scheme
Geopolitical Significance Beyond Trade
- The U.K.-EU foreign policy alignment, especially in defence and the Indo-Pacific, presents India with new avenues to deepen its multilateral coordination with the EU.
- India’s existing frameworks include:
- EU-India Strategic Partnership: A Roadmap to 2025
- Renewed Comprehensive Strategic Partnership with the U.K. (2022), focusing on cybersecurity, climate action, and maritime security.
Enhanced Global Cooperation Opportunities
- As the U.K. realigns with the EU, India could gain from unified Western support on international platforms such as:
- The United Nations
- The G-20
- The World Trade Organization (WTO)
- Strategic partnerships with France, Germany, and the U.K. are crucial for:
- India’s defence modernisation
- Achieving technological ambitions, especially in naval power.
Key Bilateral and Multilateral Defence Engagements
- India-France bilateral trade reached $15.1 billion in 2024-25.
- Landmark defence agreements with Germany and the U.K. focus on:
- Technology transfer
- Joint development projects
- A coordinated U.K.-EU defence policy may facilitate deeper trilateral/multilateral partnerships in the Indo-Pacific, where there are shared concerns about China’s assertiveness.
Leveraging India’s Global South Leadership
- India’s leadership role in the Global South, highlighted during its G-20 presidency in 2023, can be further strengthened by:
- Utilizing the U.K.-EU rapprochement
- Driving collective efforts on climate finance, digital infrastructure, and global governance reforms
- A unified Western bloc could become a more reliable ally if it engages with India in a strategic and assertive manner going forward.
Enhancing trade and talent power
- India has the world’s largest diaspora, with significant communities in the U.K. and across the EU.
- In 2024, the U.K. issued over 110,000 student visas to Indian nationals, making India one of the top sources of international students.
- Post-Brexit restrictions limited Indian professionals’ access to EU markets.
- However, renewed U.K.-EU border coordination could enable partial mobility, establishing a semi-integrated talent corridor.
- This framework could also strengthen India’s migration agreements with Germany, France, and Portugal by integrating them into a wider U.K.-EU mobility system.
Conclusion
These converging shifts — trade liberalisation, mobility reintegration, and foreign policy alignment — offer rare diplomatic and economic opportunities. To seize them, India must fast-track reforms, modernise export infrastructure, and strengthen its role in global governance.