DPG Policy Brief
EU Commissioners to Visit India Amidst Global Trade Policy Churn
Authors Dr. V.S. Seshadri, I.F.S (Retd.)
Date: February 22, 2025
This brief examines the divergent trade policy approaches currently being followed by the world’s three trading majors - China, the European Union and the United States - which are sending confusing and conflicting signals to other nations. This ongoing trade policy churn is shaking the very foundations of the international trading order governed by WTO rules.
The author draws attention to the ‘tariff threat toolkit’ that is being instrumentalised by President Trump’s administration under the guise of bringing fairness, reciprocity and economic security. He traces the creeping advances made by China over the years towards greater trade and manufacturing dominance under the umbrella of its unique economic system, that is claimed to be market driven but in fact functions under substantial state control. He further details the various industrial policy and other initiatives underway in the EU, even as EU clearly proclaims its preference to work within WTO rules.
After outlining the various initiatives underway in India towards raising indigenous capacities aimed at reducing external dependence, particularly in areas of critical or strategic importance, the author goes on to examine how India and the EU could derive mutual benefit by working together at this critical juncture. He observes that both have an interest in ensuring that the existing multilateral system does not collapse, despite its various shortcomings.
An important area of focus could be to expedite the conclusion of the ongoing India-EU FTA negotiations, for which the brief makes certain broad suggestions, particularly on regulatory issues. The experience and mutual understanding gained by the two sides in such an exercise could also help them to collaborate more closely towards much needed reform of multilateral trade, as well as the reduction of global trade tensions.
The author concludes that the forthcoming visit of the entire College of EU Commmissioners to India this month, that is in itself a special occasion, is a timely opportunity to provide the necessary momentum for India-EU trade and economic relations.
To read this DPG Policy Brief Vol. X, Issue 7, please click “EU Commissioners to visit India amidst global trade policy churn”.
The author draws attention to the ‘tariff threat toolkit’ that is being instrumentalised by President Trump’s administration under the guise of bringing fairness, reciprocity and economic security. He traces the creeping advances made by China over the years towards greater trade and manufacturing dominance under the umbrella of its unique economic system, that is claimed to be market driven but in fact functions under substantial state control. He further details the various industrial policy and other initiatives underway in the EU, even as EU clearly proclaims its preference to work within WTO rules.
After outlining the various initiatives underway in India towards raising indigenous capacities aimed at reducing external dependence, particularly in areas of critical or strategic importance, the author goes on to examine how India and the EU could derive mutual benefit by working together at this critical juncture. He observes that both have an interest in ensuring that the existing multilateral system does not collapse, despite its various shortcomings.
An important area of focus could be to expedite the conclusion of the ongoing India-EU FTA negotiations, for which the brief makes certain broad suggestions, particularly on regulatory issues. The experience and mutual understanding gained by the two sides in such an exercise could also help them to collaborate more closely towards much needed reform of multilateral trade, as well as the reduction of global trade tensions.
The author concludes that the forthcoming visit of the entire College of EU Commmissioners to India this month, that is in itself a special occasion, is a timely opportunity to provide the necessary momentum for India-EU trade and economic relations.
To read this DPG Policy Brief Vol. X, Issue 7, please click “EU Commissioners to visit India amidst global trade policy churn”.
