The following essay originally appeared in ORF Special Report No. 277 — The State of the Transatlantic Alliance, edited by Shairee Malhotra — in September 2025.
The re-election of Donald Trump as U.S. President in November 2024 has injected another round of uncertainty in relations between the United States and its European and North American allies. A strong transatlantic bond that for almost eight decades had evolved into a highly integrated defense and economic system among the world’s leading industrial economies – institutionalized under the North Atlantic Treaty Organization (NATO) and G7 – now faces new stresses. Among other developments, Trump and his administration have in his second term made loose calls to acquire Canada and Greenland, demanded greater defense spending by NATO member states, imposed tariffs on European Union exports, and fired broadsides against Europe’s perceived over-regulation of artificial intelligence and other digital technologies. Europe has been taking countermeasures, with leaders in Germany, France, the United Kingdom, and EU-wide institutions taking more purposeful steps to increase defense spending and production, adopt autonomous capabilities, and diversify international partnerships—including with India.
India’s partnerships with both the United States and various European countries and institutions had been gradually strengthening since 1998, when India conducted its nuclear tests. The United States and European Union are among India’s largest trade partners and sources of foreign investment, as well as homes to large Indian diasporas. Despite differences, such as over India’s relations with Russia, New Delhi’s relations with the United States and Europe were also increasing in strategic significance as partners on defense, technology, counter-terrorism, space, and even nascent nuclear cooperation. While Trump initially signaled relative continuity in advancing the U.S.-India partnership – particularly on defense, energy, technology, and economic relations – new frictions arose in mid-2025 over U.S.-Pakistan ties and trade. Taken together, Trump’s approach to both Europe and India present an opportunity to broaden and deepen relations between them. This could potentially extend to defense co-production and research and development; a major trade agreement; collaborations on technology regulation, infrastructure, and applications; connectivity in the form of the India-Middle East-Europe Corridor (IMEC); and mobility agreements that accelerate people-to-people exchanges. India will likely attempt to advance relations with both sides of the Atlantic, but should tensions between the United States and Europe persist, it will alter the dynamic in ways that may present new urgency – and new opportunities – for major breakthroughs.
Transatlantic Tensions
The presidency of Joe Biden might be remembered as the last U.S. administration to prioritize the transatlantic relationship with traditional U.S. allies in Europe. Consolidating NATO, particularly in the context of the Russia-Ukraine war, was a major priority. But so was working with key European allies on a number of economic and security-adjacent policies, such as technological export controls. These efforts were not always appreciated by European leaderships, who often saw efforts at U.S. industrial policy – such as the Inflation Reduction Act (IRA) that addressed clean energy subsidies – as competitive. Early efforts by European leaders, particularly Germany and France, to consolidate a Comprehensive Agreement on Investment (CAI) with China also increased skepticism of Europe among an otherwise Europe-friendly administration. By the end of Biden’s four year term, however, the transatlantic partnership had made significant strides, embodied in efforts at the G7 and NATO expansion to include Sweden and Finland in the alliance.
Under Trump’s second term, however, Europe was in for a major shock. The new administration discouraged high-level contacts with European leaders, such as EU High Representative Kaja Kallas. Trump made sweeping claims about forcibly purchasing Greenland from Denmark, embarrassing a country that had long been seen as a model U.S. ally in Europe. Efforts at bringing a short end to the war in Ukraine, including through a very public disagreement with Ukrainian president Volodymyr Zelenskyy in the White House, further added to the administration’s tiff with Europe, as did two speeches by Vice President J.D. Vance in Munich and Paris, which appeared to lecture Europe on its social, immigration, and regulatory policies.
In an otherwise divided Europe, there is now greater unity of purpose around a strategy of greater autonomy from the United States and further international diversification. In the United Kingdom, the government of Keir Starmer has attempted to reforge areas of practical cooperation with Europe that had diminished following the Brexit referendum. In France, Emmanuel Macron has continued to emphasize strategic autonomy, including in defense partnerships in the Middle East and Asia. Germany under a new Chancellor Friedrich Merz has attempted to recalibrate nuclear and defense policy. Despite some euroscepticism, Italy’s Prime Minister Giorgia Meloni has also attempted to work with new European partners. A loose coalition of Nordic and Baltic states, along with Poland and the Czech Republic have stepped up defense industrialization efforts, with an eye on Russia’s military posture. Southern European states, such as Spain and Greece, are experiencing higher economic growth rates more than a decade after the euro crisis. Yet despite these efforts, questions remain about European capabilities and unity is often undermined by the contrasting approaches of Hungary under Viktor Orban and Slovakia under Robert Fico.
New Opportunities for Europe and India: Defense, Trade, Connectivity, Tech, People
The transatlantic rift presents an opportunity for India to consolidate relations with Europe and the European Union. This is a relationship between two of the world’s largest democratic entities and large population centers that has often fallen short of investment and expectations. The EU and India often found themselves on opposite sides of global trade and regulatory talks, while their structures and expectations on security were often at odds with one another. India often found European companies and entities too sympathetic to China, while Europe retained concerns about India’s continued relations with Russia.
At the same time, India is actively exploring new kinds of partnerships with new European partners, beyond a traditional focus on France, Germany, and the United Kingdom. This includes a regular summit with Nordic countries, new embassies in the Baltics, wide-ranging partnerships in Central and Eastern Europe (including Poland), connectivity initiatives with Mediterranean countries such as Greece and Cyprus, and defense cooperation with Spain. India’s interests, investments, and engagements with Europe writ large are arguably greater than they have been since the end of the Cold War.
However, several new developments open unprecedented opportunities for partnership. The first involves geopolitical changes. In Europe, concerns about China’s role as a global actor increased following the Covid-19 pandemic and Beijing’s ‘wolf warrior’ diplomacy, seemingly reinforced by Beijing’s support for Moscow following Russia’s invasion of Ukraine. Concerns about China’s dominance of supply chains and its potential domestic implications, including for employment, continue to worry some European policymakers. In India, concerns about Russia’s growing partnership with China have been reinforced by supply chain constraints and diminished Russian capacity when it comes to defense manufacturing and strategic exports. Both India and Europe are also adjusting to uncertainty in the United States, and are more likely to view each other as sources of stability in a tumultuous world. Greater opportunities for defense collaboration, including in co-production and defense technological development, present themselves as a consequence.
Second, there is perhaps an unprecedented opportunity to advance an EU-India trade agreement. While difficulties remain, including a traditional EU preference for a high-quality trade agreement, concerns by both parties about agricultural imports, and a prospective Carbon Border Adjustment Mechanism (CBAM), there is a shared interest in codifying the commercial partnership. The EU agreement in 2024 with several South American economies (Mercosur) and India’s trade agreement with the European Free Trade Association (Norway, Switzerland, Iceland, and Liechtenstein) and United Kingdom offer promising signs of what is possible.
Third, the possibility of an India-Middle East-Europe Economic Corridor (IMEC) announced with an MoU in 2023 has the potential to connect India and Europe while helping to stabilize a volatile Middle East. Although complicated by the Israel-Gaza and Israel-Iran conflicts after 2023, this ambitious initiative has the potential to link two large markets in India and Europe. It could also help stabilize what has been a volatile region, and build redundancies around choke points in the Suez Canal and Red Sea, both of which have been threatened in recent years. Work has continued in developing port infrastructure in the UAE, as well as road, rail, and technology links with Saudi Arabia. On the western side, Israel has been linking with Cyprus with endpoints being identified in places like Marseille in France, Trieste in Italy, and Thessaloniki in Greece. These countries could be among the beneficiaries, although the success of the project would depend in part on political normalcy between Saudi Arabia and Israel.
Fourth, as the United States becomes more sceptical of large-scale migration, an opportunity has arisen for India and Europe to increase people-to-people links. To be sure, immigration remains a politically fraught issue in Europe. At the same time, it seeks professional talent given declining birthrates, while hoping to stem illegal migration. For India, increasing opportunities for business travelers, tourists, students, and temporary workers is important for its growing economy, while concerns remain about human trafficking and illicit activities. The recent conclusion of a number of bilateral mobility agreements – that create better protocols for India and Europe to manage the flow of people – has led to a welcome increase of Indian students and temporary workers to Europe, benefiting both economies. More such agreements, including possibly with the Schengen zone as a whole, might enable India and Europe to better take advantage of talent flows.
Finally, with India hosting an Artificial Intelligence Action Summit in February 2026, there is an opportunity for Europe and India to consolidate their technology relationship. India was only the second country, after the United States, with which the EU initiated a trade and technology council (TTC). This initiative encompassed a set of three working groups on emerging technologies (such as AI, semiconductors, and digital public infrastructure); green and clean energy and resources; and supply chain security and investment screening. More importantly, there is an opportunity to coordinate approaches to AI regulation and safety, infrastructure, and applications.
There remain many challenges to consolidating India-Europe relations over the coming years, including both approaches (as over trade or climate policy) and implementation (as over connectivity). Navigating these will require greater intellectual investment, including in public policy, in each other, and further exchanges between European and Indian officials and experts. Nonetheless, the transatlantic rift presents a valuable opportunity for India and Europe to take their relationship to a qualitatively new phase.
Dhruva Jaishankar is Executive Director at ORF America.