Explained : A Tale of Two Visits to India and Its Impact

January has seen two major—but contrasting—visits to New Delhi by European leaders. The EU-India Summit, where European Council President António Costa, European Commission President Ursula von der Leyen, and Indian Prime Minister Narendra Modi announced the “Mother of all Free Trade Deals” (von der Leyen) on January 27, is a potential foundation for an important strategic relationship. 

Conversely, German Chancellor Friedrich Merz’ visit to India on January 11-13 was an unflashy affair, lacking major announcements or pageantry but nevertheless signaling India’s importance to Berlin. Together, they demonstrate the seriousness of geopolitical diversification in both Europe and India. 2026 could well mark a breakthrough in strategic and economic relations between these powers. 

The EU-India Trade Pact

Despite the grand rhetoric, the European Union’s new trade agreement with India is comparatively shallow, far smaller than the EU typically accepts. Many politically sensitive areas on both sides were left out, particularly agricultural products such as beef and dairy and the Carbon Adjustment Border Mechanism. Such limitations leave many trade experts frustrated, and they possibly create barriers for the European Parliament’s eventual ratification of the deal.

That is not to say the agreement is without merit. There are winners in Europe’s beleaguered industrial sector, with many machinery and chemical tariff lines reduced from the start of the treaty. Conversely, India’s textile sector, hit hard by US tariffs, is another major beneficiary. Elsewhere, for sectors like automobiles, tariff reductions will kick in slowly over the coming 10 years. This echoes the provisions of the recently concluded UK-India trade agreement, again creating frustrations in Brussels that believes the EU’s market size should enable quicker and deeper access. 

Much of the trade pact’s value is political. The Delhi foreign policy community has a long tradition of judging trust not by legally-enforceable alliance treaties but through actions and symbolic diplomacy. Therefore, concluding the deal is itself a major win, as confirmed by von der Leyen’s bombastic rhetoric and the symbolic celebratory scenes at Hyderabad House. 

The trade pact overcame both sides’ traditional inflexibilities; in the past, EU trade agreements demanded deep market access and often social, environmental, and human rights standards. India is equally notorious for defending itself against perceived exploitation by more industrialized countries and threats to its central national goal of poverty reduction and economic development. 

Therefore, the political capital spent on forcing both bureaucracies to make the deal matters, affirming that in the face of China’s continued rise and the Trump administration’s geopolitical challenges, they are placing bets on each other. Further opportunities for building mutual trust will follow, through full implementation of the deal and actions taken to maximize it. The hope is that such actions will then unlock closer strategic and economic ties between the EU, European governments, and India. 

The German Chancellor’s Visit

Merz’ visit was a much quieter affair, lacking a major deal or the pageantry previously bestowed on US President Donald Trump or Australia’s Prime Minister Anthony Albanese. However, it was symbolic that Merz made India his first destination in Asia and that Modi chose to invite him to his home state of Gujerat. Furthermore, the bilateral agreements that were signed in early January  should also plug some of the relationship’s existing gaps. Creating German visa pathways should increase people-to-people ties, as should Modi’s invitation for German universities to set up Indian campuses. 

The defense roadmap, sketched out between the two countries, is supposed to emulate the US-India relationship, which has turned sour under Trump, by setting long-term ambitions and using regular meetings to build trust and familiarity between government and industry on both sides. However, there was no announcement on a reported $8 billion deal on submarines. This would represent a political breakthrough because it would establish Germany as one of India’s largest defense partners and would give India access to advanced technology.

Without the major announcement, the significance of Merz’ visit perhaps stemmed from its almost routine feeling. Indo-German relations have after all come a long way. Merz’ second stop was Bangalore, marking the success of major German companies such as Siemens and Bosch in the country; his delegation included 23 business leaders. 

Skilled Indian migrants to Germany have grown from a low base, but they now constitute the largest cohort of international university students. A strong green technology partnership is already established, with Berlin investing €10 billion in India, particularly in the rollout of solar generation. Given missteps under the previous German government led by Chancellor Olaf Scholz, political relations also appear stronger, with far greater understanding of Indian positions on Kashmir and the country’s dependence on Russian military technology. 

Merz’ visit therefore demonstrated the established centrality of India in Berlin’s emerging strategic calculus; whether it comes to global governance or trade, India is viewed as crucially important. 

Realizing the Benefits of Diplomacy

In India’s relations with the EU, or specifically Germany, ensuring that diplomacy translates into material gains will not be straightforward. Given the existential threat posed by Russia to the Europeans, New Delhi’s relations with Moscow will complicate the relationship. Both sides will also need to adjust to the geopolitical turn, where traditional concerns—from human rights to market access—are to some extent trumped by a need to respond to global disorder. 

Additionally, India will only value a partnership that embeds some form of policy equality. India wants to be taken seriously as a provider, or co-creator, of technology and knowledge. This clashes with established cultural perceptions in Germany and elsewhere in Europe that tend to see themselves as offering industrial products, technology, and expertise. 

For the partnership to flourish, this will need to change. Where appropriate, governments should seek to adopt India’s innovations, for example in frugal public policy, or utilize its leading expertise in areas like space. The private sector will often need to embrace joint ventures to fully access each other’s markets. Some Indo-German bilateral initiatives have adopted this modality of equality, including the Indo-German Science and Technology Centre (IGSTC) and Indo-German Centres of Excellence on Innovation. 

However, to firmly establish India as one of Europe’s alternatives to China, whether in renewable power equipment like solar panels or critical minerals, serious engagement is required that takes principles of equality to heart. 

A New Strategic Dawn?

Many media outlets have been quick to analyze this trade through the lens of the Trump presidency, presenting the deal as a rebuke to the White House and an assertion of independence. Undoubtedly, Trump’s tariffs (including the latest threat against those trading with Iran), and hostility to Europe, have sharpened minds. 

However, seeing January’s moves only through a Trump prism is a mistake. Ties between Berlin, Brussels, and New Delhi have their own logic. Shared concerns over China and a desire to diversify partnerships has led to a sustained effort over the past five years to forge closer ties, and there is a longstanding appreciation respectively of India’s rise and Europe’s ability to supply technology and investment. 

We could look back on January 2026 as a significant turning point in this longer German/EU push toward India. The apparent chemistry of the leaders contrasts with past outright critiques of India’s closeness to Russia and openly expressed concerns about the country’s downward democratic trajectory. However, turning these ties into strategic and economic wins will require significant work in the years ahead. 

Barnaby Dye is a British Academy Global Innovation Fellow at the Germany Council of Foreign Relations (DGAP) and a lecturer at King’s College London.