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It was not many years ago that Narendra Modi’s reputation in Europe, and much of the rest of the world, was dogged by controversy surrounding his political past. However, the Indian prime minister is now widely feted internationally.

This factor was highlighted, most recently, during Modi’s state visit to the UK. Modi was accorded all the pomp that the UK state could muster, including a meeting with King Charles. The political icing on the cake was the signing with UK Prime Minister Keir Starmer of the newly agreed India-UK trade deal that will boost bilateral trade on goods and services which was estimated at around £41 billion ($55 billion) in the 12 months through to September 2024, according to the UK government.

The huge lure of India for the EU and much of the rest of the West is not just economic, tantalizing as the prospect is of a market projected, according to Morgan Stanley, as being on a pathway to surpass Japan and Germany to become the world’s third-largest economy in coming years. This includes a middle-class consumer market expected to reach about 95 million by 2035, a number larger than the current population of every EU nation, including Germany.

In addition, India is widely perceived in the West as a relatively friendly, long-term geopolitical ally. During the Cold War, India was aligned with the Soviet Union, and had a protectionist economy moving away from the colonial era.

Yet, European and wider Western leaders regularly highlight that today there is a shared commitment to a rules-based global order, effective multilateralism, and sustainable development. There are also converging interests around shared defense mechanisms, including for maritime security in the Indian Ocean, where around 40 percent of bilateral trade passes.

In the US, President Donald Trump would welcome a tariff and wider trade deal with Modi. However, it may be Europe that has been pushing hardest of any region for agreements with New Delhi.

In March 2024, a trade agreement was signed by the four-member European Free Trade Association — Norway, Switzerland, Iceland, and Liechtenstein. This will trigger EFTA investment in India of about €95 billion ($111 billion) in a range of industries, including pharmaceuticals, machinery, and manufacturing. The deal arrived after almost 16 years of negotiations and will see India lifting key import tariffs on industrial goods from the four countries.

The political icing on the cake was the signing with UK Prime Minister Keir Starmer of the newly agreed India-UK trade deal. 

Andrew Hammond

Next in line is the UK, which under several recent prime ministers, including Rishi Sunak and Starmer, has pushed hard for the deal that has now materialized. Of course, London and New Delhi have long had a unique relationship dating back to the British Empire and today’s Commonwealth. What the new deal seeks to deliver is entrenching this in the context of a modern trade deal which can boost key UK sectors, including defense manufacturing, international investment — via the City of London — and technology, including telecoms.

With the EFTA nations and the UK getting a deal done, the EU is also doubling down to secure an agreement with India. The seriousness with which Brussels takes India’s economic opportunity was shown by the visit earlier this year of European Commission President Ursula von der Leyen and the rest of the College of 27 Commissioners to India for the talks.

This remarkably rare display of European political commitment to “advance trade, economic security, and resilient supply chains, along with a common tech agenda and reinforced security and defense cooperation” helped kick-start resumption of India-EU negotiations on a proposed trade agreement. The massive EU market is India’s largest single trading partner, with trade in goods valued at €124 billion in 2023, an increase of almost 90 percent in the past 10 years. About 6,000 European companies are located in India, providing 1.7 million jobs. One of the goals of the proposed new India-EU trade deal goal is enhancing collaboration on economic opportunities including digital transition and green technologies, including digital public infrastructure, and resilience of key value chains.

What is remarkable in the current big European push toward trade deal-making with India is how much previous EU and UK concerns about human rights have been de-emphasized. Economics has come to dominate bilateral relations in a way that has been condemned by some nongovernmental organizations.

To be sure, the Indian prime minister is now widely acclaimed not just in Europe, but in much of the wider world, too. Australian Prime Minister Anthony Albanese, for instance, even likened him to rock musician Bruce Springsteen at a Sydney event in 2023.

This is much removed from the time when Modi’s reputation was dogged by controversies surrounding his political past, especially in the period before he became prime minister. This includes treatment of religious minority groups by his Hindu nationalist Bharatiya Janata Party.

More recently, Modi has also been walking a diplomatic tightrope between India’s historical ally Russia and the West over the Ukraine war. He has, so far, declined to condemn the 2022 invasion by Moscow, while India snaps up discounted Russian oil that was previously consumed by European nations. Moreover, Russia continues to be one of India’s largest arms suppliers.

However, such controversies are likely to continue to be de-emphasized while the EU remains focused on its trade agreement with India. Following EFTA and the UK, Brussels now perceives a political window of opportunity for a deal to deliver deeper economic and geopolitical collaboration.

• Andrew Hammond is an associate at LSE IDEAS at the London School of Economics.