Economic Security and Resilience Review
This issue focuses on the joint visit to India by the President of the European Council, António Costa, and the President of the European Commission, Ursula von der Leyen, who were the Chief Guests at India’s Republic Day celebrations. The visit resulted in a set of substantive and path-breaking outcomes that have significant implications for India’s engagement with Europe on trade, investment, and economic security.
Foremost among these was the conclusion of the long-pending India-EU bilateral Free Trade Agreement, negotiations for which were initiated in 2007. The agreement, intensively negotiated in recent months, marks a decisive shift in India-EU economic relations. The author highlights its key provisions and offers a preliminary assessment of its potential benefits, particularly in the context of India’s evolving economic security and resilience objectives.
The visit also saw the conclusion of a five-year India-EU Strategic Agenda extending to 2030, as well as agreement to enhance cooperation in defence and security. These initiatives could reinforce the gains expected from the FTA by anchoring economic cooperation within a broader strategic framework.
Also briefly covered in this issue is the February 2 announcement of a framework bilateral trade agreement between India and the United States, following protracted negotiations over the past year. While full details are awaited, indications suggest that Indian exports will now face a reduced “reciprocal tariff” rate of 18 per cent, representing a substantial easing of recent trade frictions.
The author also examines outcomes from two other high-level visits during the month – by German Chancellor Friedrich Merz and UAE President Sheikh Mohamed bin Zayed Al Nahyan – both of which placed considerable emphasis on economic security-related cooperation.
On the domestic front, this issue examines elements of the Economic Survey 2025-26 presented on 29 January, projecting economic growth of 7.4 per cent for the current year and around 7 per cent for the coming year. It also analyses economic security-related measures in the Union Budget for 2026-27, presented to Parliament on February 1.
Key proposals in the Budget include initiatives aimed at scaling up domestic manufacturing in seven strategic and frontier sectors: biopharmaceuticals, semiconductors, critical minerals and magnets, electronic components, capital equipment, chemicals, and textiles. A 21-year tax holiday is proposed for foreign investors establishing data centres in India, signalling a calibrated shift in India’s approach to attracting investment in high-technology sectors. The Budget also provides targeted customs-duty incentives to encourage investment and production of capital goods and the development of nuclear power.
To read this issue please click ESRR, Vol. IV, Issue 1.
