Washington has reacted with concern after India and the European Union sealed a landmark trade pact, raising fears that the United States could be sidelined in global trade.
Prime Minister Narendra Modi joins hands with President of the European Council António Luís Santos da Costa and President of the European Commission Ursula von der Leyen during a meeting at Hyderabad House, in New Delhi on Tuesday, January 27, 2026. (Photo: IANS/PMO)
The free trade agreement signed this week between India and the European Union has sparked unease in Washington, where lawmakers and policy experts see it as a sign that the United States is losing ground with key partners.
The deal, announced in New Delhi, links two of the world’s largest economies and creates what European leaders describe as a massive new trade bloc. European Commission President Ursula von der Leyen called it “the mother of all deals,” saying it establishes “a free-trade zone of 2 billion people.”
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In the US capital, the reaction has been cautious and, in some quarters, openly critical.
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Also Read: India-EU FTA: Duty-free access to 99% of Indian exports, 9,425 tariff lines opened | Key details
Senator Mark Kelly said the agreement reflects a broader shift among US allies frustrated with Washington’s trade stance.
“The EU has signed a trade and security deal with India. Canada and the UK are negotiating with China,” the Arizona Democrat said in a post on X.
“This is happening because Donald Trump has alienated our allies,” Kelly added. He warned that such moves come with consequences for the United States. “These arrangements our allies are making with other countries have an effect on us, and it isn’t good,” he said.
Senior figures in the Trump administration echoed that concern. Treasury Secretary Scott Bessent criticised the European Union for refusing to align with Washington on tariff policy.
“They should do what’s best for themselves,” Bessent told CNBC. “But I will tell you, I found, I find the Europeans very disappointing.” He said the EU had declined to join the US on higher tariffs and instead pursued the India deal.
Trade analysts said the agreement highlights how other economies are pressing ahead while the US hesitates. The Information Technology and Innovation Foundation said Washington risks being left out as new rules and market access frameworks take shape.
“The European Union and India’s free trade agreement should be a wake-up call in Washington,” said Rodrigo Balbontin, associate director for trade, intellectual property, and digital technology governance at ITIF. He said the US is being pushed “on the sidelines” as others reduce tariffs and deepen cooperation.
Balbontin pointed to weaknesses in the pact. “Several European digital regulations, particularly the Digital Markets Act, are discriminatory to multinational companies,” he said. He also noted that India remains “one of the world’s most challenging major economies for intellectual property protection and enforcement.”
Even so, he said the deal could still help the US indirectly. “If this agreement helps reduce behind-the-border barriers, it could ultimately benefit the United States,” Balbontin said, as Washington looks to revive its own trade negotiations.
Others urged restraint. Mark Linscott, a former US trade official, described the pact as important but warned against reading too much into it too quickly.
“There should be no doubt that the India–European Union free trade agreement warrants attention,” Linscott wrote for the Atlantic Council. But he said it is “unlikely to transform global trade or economic growth” in the short term.
He noted that many benefits will emerge slowly through phased tariff reductions and regulatory clarity. Sensitive areas, such as intellectual property rights, agriculture, and the EU’s Carbon Border Adjustment Mechanism, were left for future talks.
The agreement also still needs domestic approvals, including consent from EU member states and the European Parliament.
India and the EU first opened trade talks in 2007. Negotiations stalled for years before restarting in 2021. Together, the two account for more than 20 per cent of global economic output.
For Washington, analysts say, the pact is less about immediate losses and more about long-term positioning. As partners move ahead with new trade frameworks, pressure is growing on the United States to reassess its own approach, or risk being left watching from the sidelines.
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