London Daily

Focus on the big picture.
Friday, Oct 09, 2026

Trade tensions simmer ahead of EU-India summit

Trade tensions simmer ahead of EU-India summit

The inaugural EU-India Trade and Technology Council Summit will have to overcome thorny questions between two of the world’s largest democracies.

When European Commission officials and senior Indian ministers meet on Tuesday for their first-ever trade and technology summit, both sides will be eager to show how two of the world's largest democracies are working hand-in-glove on everything from artificial intelligence to climate-saving technologies.

Yet under the surface, ongoing tension — particularly related to tricky trade disputes like an upcoming European Union levy on foreign businesses selling their carbon-intensive wares within the 27-country bloc — will overshadow what Brussels and New Delhi want to frame as a meeting of like-minded partners.

The EU-India Trade and Technology Council brings together some of India's most high-profile politicians, including Subrahmanyam Jaishankar, the country’s external affairs minister, and Piyush Goyal, its trade minister, with Commission counterparts like vice presidents Margrethe Vestager and Valdis Dombrovskis.

"The European Union and India are committed to deepening their partnership and leveraging their respective strengths to accelerate the development and deployment of cutting-edge digital technologies that will benefit both societies and promote global progress," according to a draft of the upcoming summit's communiqué that was obtained by POLITICO.

Yet conversations with Commission and Indian officials, all of whom spoke to POLITICO on the condition of anonymity to discuss each side's internal thinking, reveal likely difficulties in a relationship mired in tense trading negotiations and differences in how to approach tech challenging like global telecommunication standards and how far governments should go in regulating AI and data.

A lot of that tension relates to the EU's upcoming Carbon Border Adjustment Mechanism, a border tax that comes into force in 2026 and will see importers, including those from India, having to pay a levy equivalent to the carbon priced paid by their European rivals that are part of the bloc's carbon emissions trading scheme.

For New Delhi, those additional costs constitute unfair trading practices, particularly for a developing country whose 1.4 billion people are not as wealthy as the EU's 450 million inhabitants. European diplomats, who also spoke on the condition of anonymity, pushed back at those claims, adding that changing the carbon border tax is a red line for Brussels and that Commission officials will explain to their Indian counterparts on Tuesday that the levy is here to stay.

Another trade irritant is how to deal with sustainability requirements the EU wants India to sign up to. These demands are being discussed in separate free trade negotiations between Brussels and New Delhi, but risk overshadowing part of the discussion on climate emissions at the Trade and Tech Council. The trade negotiations are still in a relatively early phase, although the last round "allowed for a more dynamic approach between both sides," a Commission spokesperson said.


Cleantech, standards and 'GovTech'


Still, the upcoming EU-India summit won't all be about trade bickering.

Both sides will also outline concerted efforts to work on global artificial intelligence standards, coordinate upcoming investments in their respective semiconductor industries and share expertise on clean technologies like those associated with the waste management and electric car industries, according to the draft communiqué and discussions with two EU officials and an Indian policymaker.

For Brussels, the goal is to steer New Delhi toward a growing Western consensus to create global digital and technology standards on everything from next-generation telecoms equipment to how to develop so-called quantum computing technologies. That would then help the likes of the EU and India to present a united front against China's own separate efforts to push its own view on how these international standards should develop.

So far, India has avoided picking a side on many of these issues, although it has its own geopolitical and economic tensions with China.

For New Delhi, officials are expected to champion the so-called "India Stack," or government-backed open digital platforms that allow hundreds of millions of locals to access government digital services and private online products, all through a few swipes of their smartphones.

The country's officials and industry executives view these platforms as a viable alternative to those offered by the likes of Google and Meta, and they lie at the heart of how the world's most populous country has positioned itself as a global digital player.

While many of these platforms are not owned by India, the country's government is trying to export these services — known as 'GovTech' — to others across the Global South, something that Brussels is eager to support, as well as offer its own technical expertise to ensure such an expansion upholds the toughest cybersecurity standards.

"The Indian Stack has scaled massively," said Divij Joshi, a researcher from University College London who specializes in India's digital platforms and governance. "India wants to promote that to the wider world."

Newsletter

Related Articles

0:00
0:00
Close
UK Announces New Sanctions on 17 Russia-Linked Entities During Foreign Secretary's Ukraine Visit
UK and Germany Finalize Kensington Treaty to Strengthen Defense and Technology Cooperation
Britain Maintains Diplomatic Mission in East Jerusalem Despite Israeli Closure Deadline
English Councils Push Government to Rethink Proposed Funding Cuts
Scottish Homebuilding Falls to Lowest Level in 11 Years
BBC Chief Matt Brittin Defends Restructuring as Staff Challenge Job Cuts
UK Finance Warns High Energy Costs and Bond Yields Are Complicating Fiscal Outlook
UK Adopts All 44 Recommendations on Regulating AI in Healthcare
Chancellor John Healey Prepares Autumn Budget as Borrowing Costs Strain Public Finances
UK Investigators See Strong Indications of Iranian Link After RAF Fairford Security Operation
Laura Trott Pledges Tighter Controls on Political Activism in UK Classrooms
Welsh Ministers Launch Long-Term Review of North Wales and Anglesey Crossings
Welsh Government Orders 18-Month Study of Road Solutions Around Newport
Reform UK MP Sarah Pochin Faces Scrutiny Over £800,000 Second Home Purchase
British Households Grow More Concerned About Fuel and Energy Prices
NHS Leaders Warn of Rising Winter Pressure on Emergency Departments
Kemi Badenoch Proposes £2.3 Billion Employer National Insurance Cut for Young Workers
Middle East Conflict Could Erase UK Fiscal Headroom, Economists Warn
Manchester City Found Guilty of Multiple Premier League Financial Rule Breaches
UK Security Services Find Strong Indications of Iranian Role in RAF Fairford Incident
Costa Coffee Returns to Operating Profit on Iced Drinks and Menu Changes
Asos Warns Customers After Unauthorized Access to Retail App and Data
Kemi Badenoch Puts Growth and Deregulation at Center of Conservative Conference
Campaigners Warn of Deepening Social Care Crisis for Disabled Adults
Study Finds Rising Early-Onset Cancer Rates Among Adults Under 50 in Britain
UK Coach Operators Warn High Diesel Prices Could Force Route Cuts
FCA Opens Independent Review Into Handling of Epstein-Linked Whistleblower Case
Argentina Vows to Block Falkland Islands Offshore Oil Development
UK Chancellor Prepares Fiscal Measures and Welfare Reforms Ahead of Autumn Budget
Sainsbury’s and Morrisons Explore Potential Multi-Billion-Pound Merger
UK Weighs Tariffs on Chinese Electric Vehicles to Align With European Union
UK Threatens Diplomatic Expulsions Over Planned Closure of East Jerusalem Consulate
UK Energy Price Cap Hits Three-Year High as Middle East Conflict Raises Costs
Seventh Arrest Made in Suspected Terror Plot at RAF Fairford
Systemic Education Collapse Sparks Mass Student Uprisings in France
Green Party Faces Backlash Over Resolution Equating Zionism With Racism
Conservatives Debate Scrapping Environmental Rules for New Homes
Cornwall Insight Warns UK Energy Bills Could Approach £2,000 This Winter
UK Coach Operators Warn of Service Cuts as Diesel Prices Exceed £2
Scottish Parliament Approves £68 Billion Budget With New Tax and Property Measures
FCA Opens Independent Review Into Handling of Epstein Whistleblower
UK Government Drops Plan to Suspend Jury Trials in England and Wales
Bank of England Holds Interest Rate at 3.75% as Markets Watch November
Two Iranian Nationals Charged Over Alleged Plot Targeting Manchester Jewish Community
UK Fiscal Headroom Halves to £11 Billion Ahead of Budget, EY Warns
US Bomber Withdrawal From RAF Fairford Prompts UK Security Review
Sarah Wakfer Appointed Chair of Northern Ireland’s Health and Care Regulator
Scotland Housing Completions Fall to 11-Year Low Amid National Shortage
UK Water Companies Face Tougher Oversight and Unannounced Regulatory Inspections
Middle East Conflict Pushes UK Fuel and Wholesale Energy Prices Higher
×