The recently concluded India–European Union Free Trade Agreement (FTA) should be seen as a long-term enabler of India’s growth rather than a source of immediate consumer benefits, Anil Padmanabhan, economic journalist and editor of Capital Calculus said in an interview, describing the pact as a “benchmark moment” in India’s economic evolution.
Padmanabhan argued that trade remains central to growth for a developing economy like India. Drawing a comparison with Vietnam, which signed an FTA with the EU in 2015, he noted that Vietnam’s per capita income has since climbed to around $5,500–$6,000, while India’s has risen from roughly $1,700 to about $2,700–$3,000. “You cannot grow without trade,” he said, adding that FTAs are increasingly the only viable pathway in a world marked by economic fragmentation, wars and tariff-driven uncertainty.
Although negotiations began more than two decades ago, Padmanabhan said the deal became possible only recently because India now has “something to give” at the negotiating table. Earlier, India tended to walk out of multilateral trade talks because it sought concessions without offering reciprocal market access. “Today India is willing to give and take, and that changes everything,” he said, adding that US President Donald Trump’s protectionist posture may have accelerated the agreement.
Padmanabhan cautioned that the agreement will not take effect immediately. All EU member states must ratify it, a process that could take a year or more, and implementation will be staggered across sectors. He also stressed that the pact is broader than trade, covering strategic cooperation and movement of personnel.
From India’s perspective, labour-intensive sectors such as textiles, leather and pharmaceuticals are expected to gain, alongside opportunities for skilled professionals as mobility opens up. The EU, meanwhile, brings strengths in automobiles and high-end manufacturing, creating what Padmanabhan described as a “complementary relationship” between a developed bloc and a developing economy.
On geopolitics, Padmanabhan said the agreement will not magically solve India’s China challenge. “India can only deal with China if it fixes itself,” he said, pointing to domestic structural weaknesses, skill gaps and livelihood challenges facing the country’s “new middle class”. He characterised the government’s pursuit of multiple FTAs with developed economies as a bold bet that exposes Indian industry to competition and forces overdue reforms.
Looking ahead, Padmanabhan said India’s global influence today rests largely on potential rather than power. The India–EU FTA, he argued, will be remembered as the moment India formally acknowledged its economic pivot—from entitlement to empowerment—and began aligning its trade strategy with its long-term ambition of becoming a developed economy by 2047.
