The global order is going through a rupture[1]. The rule-based order that global powers (at least normatively) observe seems to be collapsing. This transition is being noted by many experts over the last few months, as Canadian Prime Minister Mark Carney expressed it out loud at the World Economic Forum at Davos. The concern was also echoed on the same platform in French President Emmanuel Macron’s warning of a ‘world without rules’ where international law is being trampled underfoot, and only the laws of the strongest matter.

The current global situation is saturated with examples that find their reflection in the ancient Indian philosophy of ‘Matsya Nyaya’[2]: the law of the fish, where the big fish eats the small fish. Closer to the century, one draws similarly strong parallels with Orwell’s Animal Farm, where “All are equal, but some are more equal”.  This is well exemplified in the recent arm-twisting of Europe by the US on the Greenland issue, and as the constant threats of slapping high tariffs have intensified tensions between the two. As a result, European lawmakers have stalled their approval of the trade agreement between the EU and the U.S[3]. The tariff war with the US has negatively impacted the EU’s economy by increasing the cost of exports and reducing demands of European goods.

Besides, rising China’s export (rather ‘dumping’) to Europe has significantly deepened the EU’s bilateral trade deficit. The flooding of EU markets with cheap Chinese goods has adversely impacted the EU’s macroeconomic vitals like employment rate, domestic production, and trade balance. As the Chinese export model based itself on overproduction, overcapacity and price suppression, and found the demand weakening in domestic markets, it adopted an outward-looking role, shoving its excess production in the EU and other markets, openly bending the rules of free trade regimes.

This surge of Chinese imports has strained the EU’s productivity by intensifying competitive pressure on domestic industries and increasing its strategic dependence on China, leading to supply chain vulnerabilities[4]. In an interesting turn of events, China, in December 2025, imposed a temporary import[5] tariffs of up to 42.7% on EU cheese and high-fat milk and cream in response to the EU’s demand for an investigation of unfair trade practices through heavy subsidisation of China’s EV industry.

Given the external tariff shocks along with other economic factors, European economies are experiencing a slowdown bordering on stagnation[6]. It is marked by lower GDP growth, lagging productivity in technology and digitalisation, and deindustrialisation. Germany, Italy and France, the growth engines of the EU economy, have shown considerably weak growth rates of 0.2%, 0.9% and 0.7%, respectively.  In the last year, thousands of German companies filed for insolvency, losing Euro 57 billion. Besides, growth fades in the EU due to trade tensions, especially with the US and China, and underlying competitiveness issues have dampened expansion.

It is high time that the EU had taken stern measures to ameliorate its worsening situation. Experts opine that Europe should diversify its markets. In recent past, the EU has actively steered its priority to engage with businesses in economies that are economic powerhouses and growth centres of today’s world. However, this diversification should be based on tenets of trust, equality, rule-based interaction and mitigation of geopolitical risk. In this regard, India stands out as the most suitable alternate centre of power, due to its fastest-growing economy and booming markets despite being surrounded by a recessionary world. India offers the EU a two-way trade rather than being a one-sided dumping machine.

As mentioned in the special address by European Commission President Ursula von der Leyen at Davos, “…right after Davos, I will travel to India. There is still work to do. But we are on the cusp of a historic trade agreement. Some call it the mother of all deals. One that would create a market of 2 billion people, accounting for almost a quarter of global GDP. And, crucially, that would provide a first-mover advantage for Europe with one of the world’s fastest-growing and most dynamic continents.”

This statement carries a lot of context. India and the EU are in negotiations for the India-EU Free Trade Agreement, known as the Trade and Economic Partnership Agreement (TEPA). The current metamorphosis of the international order stands as an opportunity for accelerating the negotiations and achieving a deal to boost trade and investment between India and the EU. This deal is expected to reap favourable economic benefits for both the EU and India, through increased trade and investment, with India gaining greater access to the EU market and vice versa. It will unleash a vast cross-sector economies of scale and build resilient supply chains for both economies, as well as reduce the non-tariff barriers, along with the goal of robust economic growth and partnership for both.

The acclaimed “Mother of all Deals” between New Delhi and Brussels aims to remove barriers, helping EU firms (especially smaller ones) to boost their export more, open up services and public procurement markets and ensure protection of geographical indications. Besides, it aims to pursue ambitious commitments on trade and sustainable development and provide investors from both sides with a predictable and secure investment environment through investment protection negotiations.

Besides, through the ambitious the India–Middle East–Europe Economic Corridor (IMEC), which is projected as a network of strategic corridors, creating a web of resilient and diversified supply chains across different geographies[7], both the economies stand chances to unravel new and historical avenues of prosperity. Multiple economic hubs in the EU’s territory would be connected to the  Corridor’s ecosystem, allowing the EU’s landlocked members to benefit from the its commercial flows[8]. Various other subsidiary projects are also expected to spring up, joining the economic corridor with multiple ports across Europe, and scaling up the economic activities[9].

India has already implemented FTA with Europe’s non-EU members (including Switzerland, Norway, Iceland, and Liechtenstein) under the European Free Trade Association (EFTA) bloc, which became effective 1st October 2025, focusing on investment and tariff reductions, along with an FTA with the UK. On bilateral terms, recently, in their endeavours to build secure, trusted and resilient supply chains, India and Germany also signed cooperation agreements on business relations, semiconductor development, hydrogen, and renewable energy, granting Germany better access to India’s critical minerals. Besides, New Delhi and Berlin have agreed to establish the “German-Indian Centre of Excellence”, a joint platform for knowledge exchange, technology, and innovation, to strengthen cooperation in this area[10]. On the digital economy front, India and the EU are deepening semiconductor and AI ties through the Trade and Technology Council (TTC). Focusing on resilient supply chains, human-centric AI, and Digital Public Infrastructure (DPI) interoperability, with joint projects like GANANA for High-Performance Computing (HPC) and commitments to talent exchange, ethical AI, and secure digital infrastructure, the strategic alignment aim to build trusted digital ecosystems, leveraging Europe’s R&D and India’s design/manufacturing capabilities to reduce reliance on other powers.

Taking another strong step in this direction, India and the European Union agreed to sign a new Security and Defence Partnership covering maritime security, cybersecurity and counterterrorism this week. This move not only highlights how India is “indispensable” to Europe’s economic resilience[11], but also provides an opportunity to explore how the two stakeholders can anchor stability by defending open sea lanes, strengthening maritime domain awareness and resisting coercion in all of its forms[12].

These are just a few examples of how the two economies can move from transactionalism to mutualismin a world marked by swift geopolitical changes. Increasing strategic and economic partnership between Brussels and New Delhi is an opportunity to challenge and deny the hegemonic powers and notorious, rule-flouting players in the global market of their ways and means. Strongly aligning with alternate centres of power is not just an act of economic self-preservation, but also a bold statement of reclaiming economic resilience and political sovereignty. At this point, it has become crucial to subvert the Orwellian power dynamics of “more than equals” as ubiquitous in the rupturing international order.  Thus, a mutual desire for a rule-based multipolar world, with a sharp interest in deepening the strategic partnerships and economic prosperity: these fundamental values are expected to take the relations between New Delhi and Brussels forward in the coming months.

[1] https://www.aljazeera.com/economy/2026/1/21/rupture-in-the-world-order-speeches-by-carney-world-leaders-at-davos

[2] https://www.prathaculturalschool.com/post/the-hindu-philosophy-of-matsya-nyaya-and-its-contemporary-relevance

[3] https://www.cnbc.com/2026/01/21/european-lawmakers-suspend-us-trade-deal-amid-greenland-tariff-tensions.html

[4] https://www.alcircle.com/news/europe-imposes-anti-dumping-duties-on-imported-fused-alumina-from-china-116967

[5] https://ahdb.org.uk/news/impact-of-china-s-import-tariffs-on-eu-dairy

[6] https://www.euronews.com/business/2025/08/15/growth-fades-in-europe-is-the-recovery-already-running-out-of-steam#:~:text=The%20eurozone%20economy%20barely%20grew,well%20behind%20Washington’s%202.0%25%20pace.

[7] https://www.orfonline.org/research/integrating-the-eu-s-hinterland-through-imec

[8] https://www.orfonline.org/research/integrating-the-eu-s-hinterland-through-imec#_ftnref4

[9] https://www.orfonline.org/research/integrating-the-eu-s-hinterland-through-imec#_ftnref4

[10] https://www.cleanenergywire.org/news/germany-and-india-agree-closer-critical-mineral-semiconductor-renewables-cooperation#:~:text=Reuters%20/%20Clean%20Energy%20Wire,electric%20vehicles%2C%20and%20heat%20pumps.

[11] https://www.thehindu.com/news/international/india-eu-agree-to-sign-security-and-defence-partnership-next-week-kaja-kallas/article70535446.ece

[12] https://www.thehindu.com/news/international/india-eu-agree-to-sign-security-and-defence-partnership-next-week-kaja-kallas/article70535446.ece