The Economics Show How big a deal is the EU-India trade agreement? With Nicolas Köhler-Suzuki and Ajay Srivastava
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Jan 30, 2026 Ajay Srivastava, former Indian trade negotiator and founder of the Global Trade Research Initiative, and Nicolas Köhler-Suzuki, EU trade and economic security adviser, discuss the EU‑India trade deal. They explore its political signalling, tough negotiation points like cars, alcohol and procurement, sustainability and carbon clauses, unusual mobility rules, tariff wins for labour‑intensive Indian exports, and geopolitical implications for China diversification.
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Sustainability Clauses Are Politically Charged
- Sustainability and labour clauses are politically heavyweight in the European Parliament and sensitive for India, seen domestically as potential regulatory imperialism.
- The deal uses an enforceability mechanism whose real strength remains unclear and will be decisive for ratification politics.
Unusual Mobility Deal Included
- The package includes an unusual mobility agreement on short-term movement of skilled Indian workers, especially in IT.
- Implementation must navigate EU member states' national immigration competences and could provoke domestic political pushback.
Plan For Slow Diversification From China
- Treat this agreement as the start of a long-term diversification away from China, not an immediate substitute.
- Firms should view phased tariff cuts over up to 10 years as an incentive to increase trade and investment in India gradually.
