India must judicially use trade to its benefit like by pursuing bilateral FTAs with European nations instead of a blanket EU deal, leveraging their demographic deficits and resource needs of each individual country. Key demands include FDI guarantees, technology transfer, gold/rupee settlements, sovereign-backed payments, extension of foreign medical insurance to India, deportation of fugitives, media restraint, and bans on anti-India groups. Disputes will be resolved under India’s choice of Western or BRICS laws, ensuring sovereign advantage and control.
The European Union is seeking an FTA with India. On paper that sounds like a sensible liberal-trade story: deeper integration, lower tariffs, more prosperity. In reality the negotiation hides a far more urgent truth. Europe needs India’s goods food, textiles, energy inputs and manufactured components and increasingly its services and manpower. But this need comes from weakness, not strength (LINK TO EUROPE’S LOOMING COLLAPSE). Multiple EU economies are groaning under unsustainable debt burdens, struggling with deindustrialisation, and facing demographic decline. Britain and France have openly spoken of contingency support, Germany’s manufacturing base has been battered and restructured, and many smaller European states stagnate or contract. What looks large on nominal GDP tables is in many cases a mirage amplified by overvalued currencies (link to INVISIBLE CURRENCY COLONIALISM). When corrected for purchasing power and true productive net worth, the EU’s power looks far less monolithic than political rhetoric would have it.
Recognise the essential paradox: Europe is negotiating from a position of insecurity while trying to bind a rising India into rules that would preserve European leverage. If India signs a blanket, bloc-wide FTA without ruthlessly extracting guarantees and safeguards, it risks repeating old patterns—exporting low-value essentials into markets that cannot, in practice, pay for them; surrendering bargaining chips like technology, visas, and investment; and empowering a bloc that can coordinate sanctions or regulatory coercion against India later on.
That is why India must treat trade as a weapon of statecraft against western countries, like the western countries have been doing for centuries— not an exercise in naïve liberalism. The objective: convert India’s rising economic capabilities and demographic dividend into durable “net worth” — capital, technology, secure supply chains, long-term FDI, mobility for Indian professionals, legal mechanisms that return Indian offenders domiciled abroad, and hard-currency-risk mitigation. This cannot be done effectively via a single, one-size-fits-all deal with Brussels. It must be done through a strategically designed network of bilateral FTAs with selected, stable European partners, each sculpted to extract the maximum durable advantage for India.
Why a Pan-EU FTA Is a Strategic Mistake
The EU is a club of 27 disparate economies who keep quarreling with each other. A single FTA forces India to compromise across the weakest and strongest members alike, diluting bargaining power and locking India into continent-wide rules that can later be weaponised. A bloc-wide deal also creates a single counterparty that can coordinate punitive measures — sanctions, tariffs, standards enforcement and visa curbs — against India as a whole. In short:
- A pan-EU FTA risks converting India’s leverage into a single soft target for collective coercion.
- It compels India to give market access to weaker member economies in exchange for promises from the powerful — promises that are expensive to enforce and easy to renege.
- It erases the tactical advantage India gains from negotiating the price of partnership country-by-country.
Negotiating bilaterally turns those weaknesses into strengths. India can use trade to its advantage beyond trade terms: use its market, manpower, investment attractiveness and purchasing power as calibrated levers to secure specific, verifiable concessions from each partner. Those bilateral concessions — if properly written into enforceable treaty text — are much harder for a fractured EU to undo collectively.
(For context: Brussels and New Delhi have accelerated FTA talks in 2025 and intend to conclude by year-end; that makes getting the architecture right urgent, not theoretical.)
The Strategic Framework: How India Should use Bilateral FTAs
1) Pick targets using clear strategic criteria
India should not scatter its diplomatic capital. It should prioritise countries by:
- Technology & capital (Germany, France, Switzerland): extract manufacturing partnerships, technology transfer, and guaranteed green-field FDI.
- Energy & strategic industrial capabilities (France, Nordic states): tie into nuclear, hydrogen and clean-energy projects.
- Demographic deficits (Germany, Italy, Spain, Nordic states): package Indian manpower mobility as a solution to aging societies.
- Financial hubs and dispute resolution (Netherlands, Switzerland): secure banking facilitation, trade finance and arbitration frameworks.
A focused list of bilateral priorities (appended) delivers better, enforceable gains than a diffuse EU-wide bargain.
2) Make each FTA bespoke — “goods for services and skills”
Each agreement must be a bespoke barter: India opens carefully calibrated market access for manufactured goods in return for binding service-and-mobility concessions, concrete FDI obligations and guaranteed technology transfer.
- Goods for services and skills swap: market access for machinery or luxury goods should come with immediate, verifiable visa liberalisation for defined professional categories (IT, health, engineering), mutual recognition of qualifications and pathways to long-term mobility.
- Technology transfer & local manufacturing commitments: any deal that opens Indian markets to high-end European goods must include licensed technology transfer and localised manufacturing mandates so India acquires IP and production capacity, not just imports.
- Investment guarantees & timelines: FTAs should include firm, calendarised FDI commitments in key sectors, accompanied by penalties/compensations if these commitments are not met.
3) Lock payment & credit protections into the treaty text
India must never export at open credit to a debtor market without contractual remedies.
- Advance payment or confirmed letters of credit for low-margin commodity exports.
- Trade-finance guarantees and export-credit agency (ECA) underwrites: require host-country ECA or sovereign counter-guarantee for large deals.
- Currency settlement clauses: permit and prioritise invoicing and settlement in INR or mutually agreed alternative currencies. UPI must be mandated as the primary channel for cross-border trade settlements, FDI inflows, and medical insurance payments, ensuring speed, transparency, and sovereignty. All payments should be in Indian currency or any currency natively integrated with and via UPI, with gold-backed settlement beyond specified limits.
(India’s central bank has already provided mechanisms to facilitate INR settlement — use these as the plumbing to secure rupee-based trade.)
- Hard payment fallback: specify automatic conversion to gold or equivalent reserve assets if payment defaults exceed set thresholds in amount or time, or invoke sovereign indemnity clauses where the importer’s state becomes responsible.
These clauses convert soft promises into enforceable obligations and materially de-risk Indian exporters.
4) Insist on rule-based, treaty-level commitments on law-and-order cooperation
Trade is hollow if criminals hide behind host-country jurisdictions. Each bilateral treaty should have enforceable provisions for:
- Speedy extradition and repatriation of Indian-designated economic offenders / criminals / terrorists / terror supporters (with agreed timelines and enforcement penalties). Recent extraditions facilitated by Indian agencies show India can and must insist on returns as part of the bargain.
- Judicial and police cooperation: shared databases, joint investigations for cross-border fraud, and automatic mutual legal assistance on financial or other crimes.
- Preventing organised anti-India activity: require partner states to act under their own laws against groups that promote violence or subversion; require monitoring and prompt action where groups engage in criminal activity. This must be framed as rule-of-law and public-order cooperation, not censorship.
- Non-interference: explicit treaty clauses forbidding political interference in internal Indian affairs, with dispute resolution and retaliatory trade sanctions if breached.
5) Make media and public discourse part of the accountability architecture — within legal bounds
India can demand that partner countries enforce their own laws against defamation, incitement and hate speech where those laws are breached. Treaties can create diplomatic escalation channels to clarify and resolve persistent, harmful media tirades — while explicitly respecting legal protections for free expression.
Short list – India must extract in every bilateral FTA
- Binding visa liberalisation for defined skilled categories (timelines, quotas, mutual recognition of credentials).
- Firm FDI commitments to manufacturing, green tech and defence ecosystems with transfer of critical know-how.
- Rupee settlement mechanisms with partner banks mandated to open Special Rupee Vostro Accounts. (RBI’s frameworks now make this operationally feasible.)
- Sovereign payment guarantees or gold-conversion clauses for payment defaults beyond agreed thresholds.
- Extradition and repatriation timelines for criminals and economic offenders, with penalties for non-compliance.
- Non-interference and public-order clauses, and protocols to address organised anti-India groups operating on partner territory.
- Technology transfer & localisation mandates rather than mere market access.
Country Mini-Blueprints: What India Should Demand, By Example
Below are short, tactical blueprints for key partners — practical, tailored and enforceable at either the west designed bodies like the UN/WTO/ICJ/ICC etc or BRICS bodies based on India’s choice.
Germany — manufacturing, engineering & skill mobility
Germany remains Europe’s manufacturing heart for high-end engineering and industrial machinery. India must demand: local manufacturing partnerships with significant technology transfer clauses; German investment guarantees into India’s green industrial corridors; a clear visa channel for engineers and technicians tied to manufacturing projects; and a sovereign guarantee for large industrial orders to protect against buyer default. Use Germany’s desire to double trade volumes as leverage to extract binding localisation and technology clauses.
France — defence, aerospace & energy
France offers aerospace, defence and nuclear skills India values. An FTA with Paris should prioritise co-production in defence (offsets converted to actual technology transfer and local MAINTENANCE, REPAIR & OPERATIONS hubs), guaranteed timelines for FDI in dual-use manufacturing, and explicit clauses preventing French firms from sheltering Indian financial fugitives. Ensure that defence cooperation is contingent on verifiable technology sharing and Indian manufacturing content.
Nordic countries — clean energy & hydrogen partnerships
Nordic states lead in renewables and hydrogen. FTAs should secure joint ventures in green hydrogen (tech transfer, pilot plants in India), concessions for off-take of Indian green hydrogen at pre-agreed terms, and investment pledges to build India’s supply chains. These deals should be time-bound and tied to performance milestones.
Switzerland & Netherlands — finance & arbitration
With financial hubs come trade-finance channels and neutral arbitration. India’s deals should require Swiss/NL banks to open Rupee Vostro Accounts, provide predictable trade-finance lines, and agree to expedited arbitration panels for commercial disputes involving Indian exporters.
Political & Reputational Safeguards
India must attach reputational and political clauses to every FTA:
- Media accountability: partners must apply their domestic laws against incitement and defamation; persistent state-level hostile campaigns against India will trigger dispute mechanisms. Frame this as rule-of-law, not censorship.
- Preventing hostile organising: require partner states to monitor and act against clusters that engage in criminal or terror-linked behaviour on their soil.
- Non-interference: clearly defined penalties (temporary suspension of privileges, trade restrictions) for proven interference in India’s internal democratic processes.
These are sensitive measures — they must be legally framed, transparent, and reciprocal. India must not seek to silence legitimate dissent; it must insist that partners uphold their laws and not permit extraterritorial hostile political operations.
Economic Protections and Currency Re-evaluation
Two interlinked economic points are decisive: (1) currency-based distortions of GDP and (2) concrete protections against payment failure.
- Reassess GDP by net worth, not synthetic currency valuation.
Nominal GDP is heavily influenced by currency valuation. PPP and net-worth based metrics (resource ownership, industrial capacity, human capital, sovereign balance sheets) provide a truer picture of national strength. India must champion these measures diplomatically and operationally — in multilateral fora and in bilateral negotiations — so valuations reflect real productive capacity rather than financial sleight-of-hand. - Hard payment rules in treaties.
Where importers default beyond a contractually agreed period or value, partner states must either: (a) trigger sovereign indemnity and pay; (b) agree conversion to a reserve asset (gold) at pre-agreed terms; or (c) institute automatic penalty interest convertible into secured claims on partner sovereign assets or sovereign-backed ECAs. These sound severe — because they must be. They convert abstract “trust” into enforceable terms. Ostensibly, similar rules were enacted by western pharma companies on the poor countries for Corona vaccines’ sales.
(India already has central bank frameworks and legal plumbing to pursue rupee settlements with partner banks and to create Special Rupee Vostro Accounts — use these mechanisms linked to UPI as the operational backbone of the policy.)
A Final Word: Walk Away If Terms Are Weak
If bilateral negotiations reveal a Brussels or Paris or Berlin unwilling to make binding, verifiable concessions — or if they insist India accept one-sided regulatory regimes, deny visas, and retain the right to shelter Indian fugitives — India should walk. There is no shortage of alternative partners: ASEAN, the Middle East, Africa, Latin America and BRICS. India should diversify aggressively and refuse to be a subsidy source for an ailing continent. Europe’s epoch as the centre of global economic gravity is ending; India must not sign a treaty that prolongs it at India’s expense.
Europe needs Indian food, textiles, services and manpower. But need does not equal leverage unless India converts that need into durable, enforceable gains. The choice is strategic: sign a uniform FTA that hands Europe a soft landing at India’s expense, or construct a network of bilateral, weaponised agreements that transform India’s market, manpower and industrial capacity into permanent national net worth.
Play hardball, write ironclad clauses, insist on rupee settlement and sovereign guarantees, extract technology and workforce mobility, and demand the return of Indian offenders. Build dependencies outward — do not become dependent inward. That is how India protects itself from being asked to subsidise Europe’s decline, while securing the resources, capital and know-how to drive its own civilisational revival.