India, EU should reimagine partnership, finalise FTA this year: Von der Leyen

India and Europe should reimagine their partnership in an era of great power competition and geopolitical headwinds and make a push to finalise a free trade agreement (FTA) this year, European Commission President Ursula von der Leyen said on Friday.

Von der Leyen, who is visiting India with 20 members of the European Union’s (EU) College of Commissioners, also announced that the EU is exploring a security and defence partnership with India to counter common threats such as cross-border terrorism, maritime security threats and attacks on critical infrastructure.

She made the remarks while delivering a speech ahead of her meeting with Prime Minister Narendra Modi, which is expected to give fresh impetus to efforts both sides to finalise an FTA against the backdrop of US President Donald Trump’s threat to slap 25% tariffs on goods made in the EU.

“This world is fraught with danger. But I believe this modern version of great power competition is an opportunity for Europe and India to reimagine their partnership. In many ways, the EU and India are uniquely placed to respond to this challenge together,” Von der Leyen said, speaking on the theme of “Reimagining and realigning EU and India ties for today’s world”.

Describing 2025 as an “inflection point in history”, she added: “I do not need to describe the geopolitical and geoeconomic headwinds that both the EU and India are confronted with. We have all seen how countries are weaponising their sources of strength against each other, whether natural resources or new technologies, or economic and military coercion.”

She added, “It is time to take our EU-India strategic partnership to the next level. For our own security and our prosperity. For the common global challenges that we face.”

Von der Leyen, on her first visit to a major country outside Europe after getting a new mandate last year, said the proposed FTA between the EU and India would be the “largest deal of this kind anywhere in the world”.

“I am well aware it will not be easy. But I also know that timing and determination counts, and that this partnership comes at the right moment for both of us. This is why we have agreed with Prime Minister Modi to push to get it done during this year. And you can count on my full commitment to make sure we can deliver,” she said.

The FTA negotiations were first launched in 2007 and suspended in 2013. The talks resumed in 2022, after a hiatus of almost a decade, and the two sides have grappled with difficult issues such as market access, especially for European agricultural products, tariffs, non-tariff barriers and government procurement policies. The 10th round of FTA negotiations is scheduled to be held in Brussels during March 10-14.

Von der Leyen said the proposed security and defence partnership with India would be on the lines of similar partnerships that the EU has with Japan and South Korea, and it will build on work already being done by the two sides, such as their recent collaboration on maritime security.

“This will help us step up our work to counter common threats, whether on cross-border terrorism, maritime security threats, cyber-attacks or the new phenomenon we see: attacks on our critical infrastructure,” she said.

India’s has expressed interest in joining defence industrial projects under the EU’s Permanent Structured Cooperation and is also working to diversify its military supply and to access new capabilities, she said. “And I believe we can help each other to deliver on our security objectives,” she added.

Though Von der Leyen made no direct reference either to Trump’s threat of tariffs on the EU and the US administration’s economic policies that have created turmoil around the world or China’s assertiveness in economic and strategic matters, these were two central themes of her speech.

Hours before Von der Leyen’s arrival in New Delhi on Thursday, Trump said he would hit goods made in the EU with 25% tariffs and claimed the 27-nation bloc was created to “screw the United States”. The EU said it would react “firmly and immediately against unjustified tariffs”.

Besides referring to countries weaponising their strengths, such as natural resources or new technologies, or economic and military coercion, Von der Leyen said supply chains and dependencies are “used to gain influence or drive wedges between nations and regions”.

“We have seen a more aggressive posture from major powers and…the conflicts that have destabilised entire regions. How countries, in particular in the Global South, are looking for alternatives to what the international system has offered them. And we have seen clear attempts to split off parts of the world into isolated fragments,” she said.

Without referring to China and its dominance of crucial supply chains, Von der Leyen said the EU and India have common interests in derisking their economies, especially in sensitive technological areas, to enhance their economic security. “We are both looking to diversify some of our most critical value chains. From our side this is for example the case on batteries or pharma, semiconductors, clean hydrogen or defence,” she said.

The EU and India can do more by improving market access and tackling barriers to trade, and this can be a launchpad to strengthen cooperation in key sectors such as semiconductors, clean tech, AI, high performance computing and digital public infrastructure.

“By investing together in this tech and by building strong supply chains, we can create a real advantage for ourselves in today’s competitive global economy. And we should draw on each other’s skills and talents,” she said.

Von der Leyen also brought up the Ukraine crisis, saying “peace, security and prosperity are indivisible” despite the geographical distance between India and Europe. “A failed Ukraine would not only weaken Europe…But a failed Ukraine would also intensify the challenges in other parts of the world. Not least in this region,” she said.

With an eye on China, she added, “Other countries around the world are watching very closely whether there is any impunity if you invade a neighbour or violate international borders. Or whether there are real deterrents. This is why we want any peace talks to lead to a just and lasting peace.”